Employer who provide childcare vouchers to employees are required to undertake an annual Basic Earnings Assessment (BEA) prior to the start of the tax year to define the tax and NIC free amount of ChildCare Vouchers (CCV).
The rates and limits available are set by the Westminster parliament and apply across the United Kingdom. There is no variation for Scottish Taxpayers as it is not a devolved matter.
The requirements for a BEA is relevant to all those who have joined the employer provided Child Care Scheme scheme between 6th April 2011 and 4th October 2018. They also need to who have not had more than a 52 week break in being a member of the scheme.
For employee who were members of the scheme before 6th April 2011, the full allowance is available, the same as a basic rate taxpayer regardless.
There is no tax nor NI free amount for those who did not join on or after 4th October 2018 or those who have had a break in membership of over 52 weeks.
The BEA annual assessment cannot be deferred until later in the tax year when final information on taxable benefits provided to the employee is reported on Form P11D. It is an assessment made on the basis of information available at the start of the tax year.
Employers must keep a record of the basic earnings assessment (BEA) in case it is required in the course of any compliance work by HMRC.
HMRC does not stipulate the format of these records, but they must contain sufficient information to show how the individual’s basic earnings assessment has been calculated. Checking the information will form part of HMRC’s normal compliance work.
PAYadvice BEA calculator
As an aide to UK employers who continue to operate An employer Child Care Voucher Scheme (CCV), PAYadvice.UK have made available an excel based calculator which may be used for individual or multiple assessments where the employer considers this is suitable for their BEA needs.
If you have any suggestions or comments, please do contact PAYadvice.UK in aiding development and expansion of these tools.
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PAYadvice.UK 22/11/2021 updated 30/1/2022