* A template Addendum to Contract can be printed from the DOWNLOADS section of your logged in Administrator account

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1 SUMMARY OF PROCESS: 1. Employer registers their childcare voucher scheme with care-4 2. Employer receives a confirmation which includes details of their unique scheme ID 3. Employer communicates the scheme to their staff 4. Employee registers an account with care-4 (using their Employer s Unique Scheme ID) 5. Employee enters into a Salary Sacrifice* arrangement with their Employer 6. Employer makes an initial fund transfer to care-4 this is credited to an Employer Fund Account 7. Employer draws down on this Fund Account to pay the Employee s annual membership fee 8. Following payment of the Membership Fee, the Employee account is marked to Active for a 12 month period and a Membership Expiry Date is set against that individual s account 9. Once the Employee account is Active, the Employer can authorise the transfer of funds into the individual s care-4 account in respect of their Salary Reduction (the Employer Fund Account must have adequate funds to cover the transfer value) months before their membership expiry date, the Employee s account will be made available (via the administrator system) for a further membership fee payment 11. If a new membership Payment is made, the Membership Expiry Date has 12 months added to the Current Expiry Date (if the account is still active) or 12 months added to today s date (if the account has been inactive) 12. If Membership is not renewed, the Employee still has access to their care-4 account to spend residual funds but no further funds can be transferred into their account * A template Addendum to Contract can be printed from the DOWNLOADS section of your logged in Administrator account GENERAL: What do employees need in order to register with the scheme? Employees will need to have the following information to hand when registering their account: Unique scheme ID Payroll ID Home address Phone number and address CHild name and DOB Carer name and full address (inc. postcode) Carer contact details (phone / )

2 How do I add another administrator to the scheme? You are able to do this via the MANAGE ADMINISTRATORS section of your logged in account. Simply click on Create New Administrator and complete the form. Once done, an will be sent to the individual concerned with a link to a web page where they can set up their own secure login details (account password and security Q & As). Once done they will have access to their own administrator account linked to your Employer scheme. What is a Basic Earnings Assessment? HMRC require that a Basic Earnings Assessment (BEA) is carried out by employers when an employee elects to join a childcare voucher scheme. It is the employer's estimate of the employee's relevant earnings amount for the tax year that childcare vouchers are provided. This will determine the maximum amount that the employee can pay through the scheme tax efficiently. The BEA is the employer's responsibility and needs to be carried out at the point that the employee elects for the benefit, and then checked again in April each year. HMRC rules state that the BEA estimate should be based on information available at the time, the employer is not required to speculate on what may or may not take place in the future. If the employee's situation changes during the year the BEA does not need to be rechecked, it will continue to apply until the next April annual check. How do I complete a Basic Earnings Assessment? The Relevant Earnings Amount is calculated by adding together your employee's basic earnings and some other components, plus any taxable benefits that you provide for your employee. You then offset this by the aggregate of excluded income which will include, except for those employees with estimated earnings of 150,000 or above, the basic standard personal allowance for the year. The resulting amount must then be compared to the income tax bands to see if the amount of the relevant earnings exceeds the amount for the maximum level of tax relief. Earnings and benefits to be included in the Basic Earnings Assessment: Basic pay as stated in the employee's contract of employment (salary, wages and fees); Guaranteed contractual bonuses - an amount that will be paid as part of a contractual arrangement as long as the employee remains in employment, without any other conditions having to be met, e.g. a loyalty bonus or golden hello. But do not include performance-related or discretionary bonuses; Contractual commission where the commission represents a contractually agreed proportion of income generated by the employee for the business. This should be based on commission earned with the employer in the previous year, or on an average of two previous years of work with you where commission has been earned, if that produces a more beneficial result. HMRC will accept an estimate on this basis without further enquiry, but employers may be asked to justify any other basis used. This means that where an employee joins your childcare scheme on taking up employment with you, commission will not form part of their basic earnings assessment for the period up to 5th April of that tax year

3 Guaranteed overtime payments paid whether worked or not (e.g. payments of 4 hours guaranteed overtime for working every third Saturday, even if the amount of time worked is less or no work is carried out on that day at all). But do not include overtime payments that are not guaranteed; Location or cost of living allowances e.g. London weighting; Shift allowances; Skills allowances (e.g. an allowance for holding a qualification in First Aid); retention and recruitment allowances; an allowance here is taken to be a guaranteed/unconditional payment, whereas a bonus may not be; Market rate supplements; and The cash equivalent of any taxable benefits that fall within Part 3 of the Income Tax (Earnings and Pensions) Act 2003, and which are not exempt from income tax under Part 4 of that Act, (e.g. a company car made available for private use; fuel provided by an employer for private use in a company car; cash vouchers; employer-supported childcare in excess of tax relief entitlement; living accommodation, etc.). But do not include exempt benefits such as works buses, work-related training, etc Please see the following HMRC s booklets: 480 Expenses and Benefits (provides examples of taxable benefits you should include in the basic earnings assessment): _16.pdf Employer Further Guide to PAYE and NICs (CWG2) : CWG2_0816 v1.0.pdf For further information about the Basic Earnings Assessment requirements please visit The information is provided from page 9 onwards. Once the BEA has been completed you don't need to file this with HMRC, but you must keep a copy of the assessment on file (paper or electronic). The HMRC will look for it during a PAYE investigation. What happens to monies in accounts should an employee leave the company? Funds will remain available to employees for the use of payment to valid childcarers. In the event that an account is dormant (i.e. no credits / debits) for more than 18 months, in line with the Parent Terms & Conditions, care-4 will terminate the user s account and remove access to any remaining balance. As an employer, am I obliged to follow the Sex Discrimination Act (SDA)? As this is a grey area, to avoid the risk of potential litigation, until HMRC update their guidelines, we would advise that employers conform to the SDA

4 One of our participants has left the company - what do I do? In the MANAGE EMPLOYEES section of your logged in account you are able to update the status of an Employee and mark them as a Leaver. This does not affect the individual s ability to access their care-4 account to pay their carers but will prevent further funds being allocated to their care-4 account What if I have a query? To contact the support team, please visit the Contact Us section of your logged in account. From here you can submit a query which will be ed to the relevant area of the team. Please provide as much detail as possible to ensure that we have the necessary information to be able to respond to your query as quickly as possible. FINANCE: How do I make a payment to care-4? care-4 will operate a FUND ACCOUNT into which you can make payments as and when you choose. At the point you need to pay a membership fee or allocate funds to an individual's care-4 account you can draw down from this fund. In order to pay monies to your care-4 FUND ACCOUNT you will need to set up a BACS payment instruction. When making payment is it important that you quote your Unique Employer Reference - this should be used for ALL payments made to care-4 and will ensure that we can allocate funds to your EMPLOYER FUND ACCOUNT as quickly as possible. How do I find out details of the care-4 bank account? Details can be found in the FINANCE section of your logged in account Where can I find details of my Unique Payment Reference? Details of this reference can be found in the FINANCE section of your logged in account Its is also quoted on copies of all Invoices and Fund Payment Requests. Why do I need my Unique Payment Reference? It is vital that this reference is correctly quoted on all payments made to care-4 as it is used to identify funds and link them to your Employer Fund Account. Failure to quote this reference or quoting an incorrect reference will result in a delay in funds being credited to your account. Can I set up a Standing Order? Yes. Provided that you quote your company s Unique Payment Reference on the instruction then you can choose to make regular payments to care-4 via Standing Order. Monies will be credited to your Employer FUND ACCOUNT and can then be drawn down for the payment of Invoices and Fund Transfers.

5 How long after I make a BACS payment will funds take to appear in my Employer Fund Account? Funds will be credited to your employer fund account on the next working day following receipt into the care-4 bank account. For example: If you make a BACS payment on a Monday and funds are received by care-4 on the Wednesday, your employer fund account will be credited on the Thursday morning. How do I pay an employee s annual membership fee? Details of those employees awaiting payment of a membership fee can be found in the MEMBERSHIP PAYMENTS section of your logged in account. This section will only show details for ACTIVE employees who are awaiting their first membership payment or whose current membership expires within the next 2 months. IMPORTANT: You will need to ensure that there are adequate funds in your Employer Fund Account to cover the total payment value. To pay a membership fee simply click on the relevant individual(s) and confirm the instruction. Funds will then be drawn down from your Employer Fund Account. How do I make a fund transfer to an employee s account? Details of those employees eligible for a fund payment can be found in the FUND PAYMENTS section of your logged in account. This section will only show details for ACTIVE employees who are within a 12 month membership period. IMPORTANT: You will need to ensure that there are adequate funds in your Employer Fund Account to cover the total fund transfer value (your available balance is shown on screen). To transfer funds, first enter details in the Date to be Paid field (this will determine the day on which monies are allocated to employee care-4 accounts). Then enter the relevant transfer values against the individuals you wish to pay (you can pay multiple individuals as part of the same transfer instruction) and click Continue You will then be asked to check details before clicking Confirm Payments - at this point the instruction will be committed to the system and funds will then be drawn down from your Employer Fund Account. How long after I make a fund transfer will it take for funds to appear in employee accounts? If you have selected today s date, to allow for processing times it may take up to 1 hour for funds to credit. If you have selected a future date, funds should be available first thing that day. How do I see an invoice for a membership payment? Once you have processed a membership payment, a copy of the receipted VAT invoice can be downloaded from the FINANCE section of your logged in account

6 How do I see documentation to support the transfer of funds? Once you have authorised a fund transfer, a copy of the receipted Fund Payment Request can be downloaded from the FINANCE section of your logged in account How do I check what has been paid across to care-4? In the FINANCE section of your logged in account you have the facility to view a statement which will detail credits into your Employer Fund Account and also debits from that account (i.e. membership payments / employee fund transfers)