Are you looking to save money through a Childcare voucher Scheme?

A question we get often asked by our recruitment director clients' is; 

'Should I be operating a childcare voucher scheme through my own limited company?'

The facts.

An employer operating the Childcare voucher scheme will allow each parent paying basic rate tax, up to £55 per week or £243 per month tax free childcare for children up to the age of 15. Higher rate tax paying parents are allowed up to £28 p/wk and £124 p/mth respectively. Any vouchers exceeding this amount are subject to tax and NI and must be included on a form P11D. 

So, many limited company directors who employ their spouses, have use of twice the amount of vouchers. 

It works by having either a deduction in your salary (via a salary sacrifice) saving tax &NI, or having an addition to your salary, and having it as a company expense. 

Care needs to be taken when coming to a decision on which option to take. 

How it's done.

  • Your childcare provider must be registered with the OFSTED scheme. You can find out this information from the OFSTED website.

  • Set your scheme up IN YOUR COMPANY'S NAME through HMRC or pay for a scheme administrator such as Kiddivouchers or Edenred to do this for you.  

  • If you choose to use a scheme administrator they will charge commission on supplying the vouchers for this but is allowed as an additional business expense. (Yet more tax savings!) 

  • Payments MUST be made through the company bank.

The future of the Childcare Voucher Scheme.

The childcare voucher scheme is running out and no further parents can apply to join the scheme after April 2018.

You may already be aware of the Government's new 'Tax-free childcare' scheme which is being introduced from 2017. It will then be necessary for parents to decide which scheme would be more beneficial to them. There are more strict conditions with this new scheme. For example, both parents must be working and earning over a certain amount to enter the scheme.

How it works under the new 'Tax-free childcare' for every 80p paid into the scheme, the government will top this up by 20p up to a total of £10,000. For parents with lower childcare costs such as a couple of days a week, the current childcare voucher scheme may be more beneficial to them.

To conclude, in my opinion it is beneficial to enter the scheme and operate the vouchers through your limited company as long as your administration costs stay low and the costs don't outweigh the benefit. We will see what happens when the new 'Tax-free childcare' scheme is introduced next year and whether my view will change.

post by caroline

post by caroline

If you would like further information on how to set up a childcare scheme through your own limited company, please contact Cooper Curtis on 0845 303 1144 or email info@coopercurtis.co.uk.

Please note, all our content is for general guideline only, every case is different and we would recommend speaking to us before taking any action as a result of the content. The content was correct at the time it was published

Changing your company's year end

Brian looks at how and why you would change your company's year end date. 

There is no straight answer to 'what's the best year end to have' as it depends from company to company. But I have outlined some scenarios where you would consider a change; 

  • The main reason for changing your year end is for the purpose of cash-flow and to defer paying corporation tax - Due 9 months and 1 day following a year end, corporation tax could be delayed by extending your year end.

  • Or in the opposite scenario, you could decide to shorten your year end if you have a rise in profits, and balance out the CT payments.

  • By extending a year end, you could delay a deadline for submitting accounts at companies house. Its currently £150 fine penalty for lateness rising to £1,500 for more than 6 months late!

  • To align it to the tax year. By changing it to the end of March, it will make admin easier and also predict any personal tax due. 

  • If a company is in a Group a change could be made to align your companies to the same year end for the purpose of reducing admin. 

 

How often can you switch your company year end?

  1. You can shorten your year end as many times as you like,.even by 1 day. In the first year, there must be a minimum of 6 months in the accounting period.
  2. You can lengthen your company year end to 18 months, (or more if co. in administration) but a company may only do this once in every 5 years.
  3. But be aware, you can only change a company's year end at any time before the 'current accounting year end's' deadline.

Contact Brian on 0845 303 1144 if you wish to discuss your options for changing your year end date. 

         Post by Brian

         Post by Brian

Our blogs are designed to give you simple,no jargon, easy to read, information. We appreciate you are short on time, so we try to focus on a topic we get asked about frequently from our recruitment clients to give you the facts only.

If there are any blogs that you would like to see from us or would like more information about a particular blog written, please let us know. We also appreciate any feedback on ways to improve our blogs. 

Please note, all our content is for general guideline only, every case is different and we would recommend speaking to us before taking any action as a result of the content.

The content was correct at the time it was published.

'Person with Significant Control' or 'PSC' Register

 

From the 6th April, ALL limited companies & LLPs will be required to hold and have available for inspection a register of people with significant control over the business. The Companies House Annual return will be abolished and details from the PSC register will need to be submitted every 12 months instead. 

 

'What constitutes significant control?'

A person defined as having control is someone who meets one or more of the following conditions.... 

  1. Direct or indirect ownership of 25% of the company's shares
  2. Direct or indirect control of 25% of  the limited company's voting rights. 

  3. Direct or indirect right to appoint or remove a majority of the board of the company of directors. 

  4. Has the right to exercise significant influence over the control of the company

  5. Has the right to exercise significant influence or control over activities a trust or firm which itself meets one or more of the first four conditions.  

'So what do you need to do next?'

Once you have identified every person with significant control, you must maintain the following information about each individual...

  1. Name

  2. Registered office address

  3. Nationality

  4. Date of Birth

  5. Usual residential address

  6. Date from which person became a registrable person or person with significant control in the company

  7. Nature of their control (%age of control) 

An updated 'Confirmation Statement' formerly the Annual return, must be submitted to Companies house every 12 months, and a register must be maintained from April 2016. Filing at Companies House will commence from  30 June 2016. 

What will happen if I fail to keep accurate information on a register?

Failure to provide accurate information when requested for an inspection is a criminal offence and you could find yourself with a hefty fine or even up to 2 years in prison!

If you would like more information on the Person with Significant Control 'or 'PSC' Register, please contact Brian on 0845 0303 1144 or email brian@coopercurtis.co.uk. 

Please note, all our content is for general guideline only, every case is different and we would recommend speaking to us before taking any action as a result of the content. The content was correct at the time it was published.