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BT Childcare Salary Direct is an electronic childcare voucher scheme that takes advantage of government legislation, enabling working parents to make savings on childcare costs through tax and NI concessions

The key points are as follows:

• The first £55 per week per employee (equivalent to £243 per month) of ‘approved childcare’ paid for under the scheme will be free from both tax and National Insurance contributions;
• For a basic rate tax payer this could be worth up to £903 per annum (assuming not contracted-out);
• Higher rate taxpayers stand to save £1,195 per annum.

Things to note:

• The tax exemption for childcare voucher schemes is ‘per employee’, so if your spouse or partner also works for BT you should split your childcare costs between you to gain the maximum tax advantage;
• The tax exemptions on childcare vouchers apply only in respect of Registered or Approved childcare. You can choose any carer to be paid through care-4 provided they are Registered or Approved at the time of registration.

Registered care includes:

• Registered nurseries
• Registered child minders
• After school clubs
• Play schemes (including summer holiday schemes)
• Crèches

Approved care includes:

• Nannies
• Unregistered carers

In England

All Approved carers must be certified to confirm that they’ve either completed the Home Approval Scheme or are on the new Voluntary Ofsted Register*. For more information on the Voluntary Ofsted Register please visit www.ofsted.gov.uk, email enquiries@ofsted.gov.uk or call 08456 404040.

In Wales

All Approved carers must be certified to confirm that they have completed the Home Approval Scheme*. For more information please visit www.childcareapprovalschemewales.co.uk

In Northern Ireland

All Approved carers must be registered with the Health and Social Services Trust. For more information please visit www.childcarechoices.n-i.nhs.uk

In Scotland

There is no approval scheme, however nannies provided through nanny agencies registered with the Scottish care Commission are eligible. For more information please visit www.carecommission.com

*The approval process can take up to 8 weeks and must be obtained before you can start to make savings.