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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 National Insurance (NI) concessions

The key points are as follows:

• Up to £55 per week per employee (equivalent to £243 per month) of ‘approved childcare’ paid for under the scheme is free from both tax and NI;
• Basic rate tax payers can save tax and NI on up to £55 per week (£243 per month) totalling savings of £933 per annum (assuming not contracted-out);
• Higher rate tax payers save tax and NI on up to £28 per week (£124 per month) and stand to save £624 per annum;
• Additional rate tax payers save tax and NI on up to £22 per week (£97 per month) and can save £605 per annum;
• Employees in the scheme before 6th April 2011 can save on up to £55 per week (£243 per month) regardless of the rate at which they pay tax and NI provided they do not change employer or leave the scheme for a period of more than 12 months.

Things to note:

• The tax exemption for childcare voucher schemes is ‘per employee’, so if your spouse or partner also works for BT you can both join the scheme to gain the maximum tax advantage;
• The tax exemptions on childcare vouchers apply for 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 payment.

Registered care includes:

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

Approved care includes:

• Nannies
• Carers who are not legally required to be registered to care for children

In England

All Approved carers must be certified to confirm that they are on the Voluntary Ofsted Register*. For more information on the Voluntary Ofsted Register please visit www.ofsted.gov.uk, email enquiries@ofsted.gov.uk or call 0300 123 1231

In Wales

All Approved carers must be certified to confirm that they have completed the Childcare 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.nidirect.gov.uk/index/parents/childcare.

In Scotland

There is no approval scheme, however nannies provided through nanny agencies registered with the Social Care and Social Work Improvement Scotland are eligible. For more information please visit www.scswis.com

*The approval process can take up to 12 weeks and must be obtained before you can start to pay your carer.