Childcare vouchers and tax credits calculator
The receipt of childcare vouchers from an employer can reduce the amount of tax credits available to the employee. To enable taxpayers to consider their options HMRC produce a ‘better off’ calculator.
The calculator has been updated and now includes questions about a taxpayer’s income in the previous year. This should mean that the calculator is able to produce a more accurate result than was previously available.
HMRC have also produced a short guide to help taxpayers determine if they need to use the calculator. For example, if one of the following applies, a taxpayer doesn’t need to use the calculator. This is relevant, for example, to someone with only one child who doesn’t normally live with the taxpayer. In such cases HMRC says that the taxpayer will always be better off accepting childcare vouchers.
The ‘better off’ calculator can be accessed at the following address: www.ccincalculator.hmrc.gov.uk