Hi Mark

When you do the payroll for the relevant employee you need to have made a deduction which is a
pre-tax deduction, depending on which software you use it should be easy to work out. I guess if you work
out the payroll manually you will have a different gross pay for tax figure, having deducted the cost of the
vouchers from the gross pay.

You buy the vouchers sometime during the month for release to the employee at the end of the
month (assuming they are paid at the end of the month). This is done through the voucher provider's website.
You usually need to buy the vouchers at least a week before you want them released to the employee.
You are issued with an invoice which is payable just before the payday. In the payroll, having deducted the
cost of the vouchers from the employees pay, it gets credited to a Balance sheet account (you'll need to
create a nominal account).

When you enter the invoice from the voucher company you charge the cost of the vouchers to the same
nominal account, thereby negating the liability. There will also be a service charge for the vouchers
(the company we use charges 5%) which is a cost in the P & L.

The employee downloads or otherwise orders the vouchers from the voucher provider to pay to the childcare
provider, but you don't get involved in that at all.

Hope that helps, I'm sure I will have missed something !

I use Kiddivouchers for my clients as cheapest I have found, they also donate to child charity. So far not been able to fault the service. Employer signs up, then employee separately. The employee would have to nominate who they would like the vouchers to go to and how regular. The childcare scheme pays the child carer directly and invoice's the employer invoiced each month with childcare element and then the admin fee. I issue mine using "benefit in kind"on the payroll. Kiddivouchers charge 2.5% admin