Tax-free childcare is available to thousands of parents who are on parental or adoption leave, depending on the age of their child. To qualify for this service, both parties must be working at least 16 hours a week and expect to earn at least the National Minimum.
Employers cannot deduct childcare vouchers from Statutory Maternity Pay (SMP), and the question of whether an employee remains entitled to childcare vouchers during maternity leave has been a contentious issue. Guidance from HMRC states that childcare vouchers are a non-cash benefit, and women should be entitled to benefit from them throughout their maternity leave.
You can also receive childcare vouchers as a salary addition while on maternity leave, but this depends on your employer’s policies. Childcare vouchers may not be payable during maternity leave if you are in a salary sacrifice scheme and there is no occupational maternity pay to deduct them.
To qualify for tax-free childcare, you and your partner must be working at least 16 hours a week and expect to earn at least the National Minimum. Failure to do so will result in direct and indirect discrimination.
The legal position on whether women on maternity leave are entitled to benefits such as childcare vouchers has been unclear for many years. Guidance from HMRC suggests that childcare vouchers should be available as a non-cash benefit, and women should be entitled to benefit from them throughout their maternity leave.
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