July 2025 - Harmonea

Month: July 2025

Childcare Vouchers and Tax- Free Childcare

Posted on 18/07/2025 by Alison Harrison

Childcare voucher schemes allow an employee to receive childcare vouchers in lieu of up to £55 per week of their wages and no tax or national insurance will be paid on this. However, this scheme was closed to new applicants with effect from 4^th October 2018 (although the scheme continues to run for successful applicants prior to that date, provided certain conditions are met).

The government has introduced a new childcare scheme, called Tax-Free Childcare. This could provide up to £500 every 3 months, up to £2000 per year, to help with childcare costs for each child. The funds must be used for approved childcare. Therefore, the childcare provider must be signed up to the scheme.

To qualify for Tax-Free Childcare, the claimant and partner must be in work for 16 hours a week. Single claimants may also apply. It is possible to claim if on sick leave, annual leave or parental leave (although it is not possible to claim for the child for whom the parental leave is being taken). If the claimant is not working but the partner is, then it may still be possible to qualify if in receipt of certain benefits or allowances.

Child(ren) are eligible up to 1^st September following their 11^th birthday. Adopted children are also eligible, but foster children are not. If a child is disabled, then it may be possible to qualify for Tax-Free Childcare for longer.

It is possible to receive Tax-Fee Childcare at the same time as receiving 30 hours free childcare if eligible for both. However, it is not possible to receive Tax- Free Childcare at the same time as receiving Working Tax Credit, Child Tax Credit, Universal Credit or childcare vouchers (if already in receipt of childcare vouchers prior to 4^th October 2018).

The HMRC website has a “childcare calculator” link, designed to help work out whether Tax – Free Childcare is the best option, as opposed to other benefits. It is also possible to apply online for Tax – Free Childcare, again through the HMRC website.

Please contact Tracy if you would like any further information on this.

What is reportable on a P11D

Posted on 04/07/2025 by Alison Harrison

Assets transferred to an employee – this could cover things like computers, televisions, furniture etc
Assets available to an employee at their home such as television, computer, broadband. They don’t have to be reported if solely for business use or personal use is insignificant. Mobile phones are now exempt
Pecuniary payments which would include paying personal bills, rent, parking fines for their own cars, speeding fines for all cars and payment of professional subscriptions unless the professional body is on HMRC’s list of approved bodies
Mileage – can claim 45p for up to 10,000 miles, over that should claim 25p. Anything over that should be reported.
Company cars – only exemption are pooled cars which must be available to all employees and stay on the premises at night
Fuel – The most straightforward way of dealing with fuel is to pay for it personally and claim it back under the advisory fuel rate. Fuel cards are reportable with the employee then claiming the business part back. Alternatively you could be given a car allowance through the payroll and be taxed at source.
Vans – Only reportable if there is unlimited private use and fuel. Normal commuting is acceptable
Beneficial loans – these include season ticket loans, credit cards and overdrawn director’s loan accounts. The overdrawn director’s loan account is reportable on a P11D in the year it occurs if it over £10k and still outstanding 9 months and one day after year end unless interest is paid at the official rate for every day outstanding.
Private medical insurance
Various expenses – Entertaining is a bit of a mine field. A birthday present would be deemed to be a “trivial expense” (ie under £50 on any one occasion), the annual Christmas party is OK up to £150 per head as long as everybody is invited but going to Costa for an appraisal is reportable. The rules around subsistence are £5 for breakfast if you leave home before 6am, £5 for a meal if at least 5 hours on business, £10 for 2 meals for 10 hours on business and a late meal rate of £15 for finishing work after 8pm. The cost must have actually been incurred. These are only available for staff whose working patterns do not usually fall this way. There is a maximum of 3 meals per 24 hours and you can no longer stay with family and friends and still claim the allowance.