Childcare Vouchers & Scottish Income Tax

21 April 2017

Given 2017/18 is the first year Scottish Income Tax rates are different from the rest of the UK, we have provided clarification below around the income levels used to calculate the appropriate tax and NICs relief for childcare vouchers where Scottish Income tax is relevant.

As a reminder, eligibility to childcare vouchers depends on the employee’s income level and employers have to estimate the employee’s relevant earnings at the start of each tax year or when a new employee joins the scheme in order to ascertain the level of childcare vouchers on which tax and NIC relief can be obtained.

However, because eligibility criteria for childcare vouchers is not devolved to the Scottish Parliament, the basic rate and higher income tax rates for the UK are what the relevant earnings criteria are based on.

If you require any further information on this, or support on how to carry out the earnings assessments then please contact Charlotte Stewart, IES Manager ( or your usual AAB contact.

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