Pension requirements

Whether you are a registered childminder, self-employed childcare provider, foster parent or run a childcare facility you should be signed up to a pension scheme. Whilst the rules are different depending on if you are employed or self-employed the theory behind pensions is the same – you need to save for your retirement!


If you are a childcare employer there are specific rules you must adhere to regarding pension provision. All employers have a legal obligation to provide a pension scheme for any of their employees who wish to join a pension scheme – this applies if you have hundreds of employees or just one. If your employee does not qualify for a workplace pension scheme you do not have to legally enrol them into one. However if they request to join a workplace pension scheme the employer cannot refuse. If your employee does not qualify and they do not want to be enrolled in a scheme there are still obligations you have to adhere to by The Pension Regulator.

Each pension will have contributions made into it by the employee, the government and the employer so it is imperative that you keep full records of what is being paid and to where. The most common pension scheme for employers is the government’s own pension scheme, NEST.

It is worth noting that there are different requirements for your employees joining the scheme. For instance, an entitled worker – someone who is aged between 16 and 75 and has earning either at or below the lower level of qualifying earnings (currently £512 per month or lower) – can join their employer’s scheme however the employer is not obliged to make contributions on their behalf.

You can find out more information on the different requirements for the employers workplace pension scheme here.

Employer Contributions

The contribution requirements made by both the employee and the employer varies depending on which workplace pension scheme you have enrolled in. We provide a pension service through our monthly payroll provision using NEST which we can discuss with you.

Currently the minimum contribution set by the government is 8 per cent of your salary and this must be made up by both the employer and the employee, although the minimum employee contribution must be 5 per cent – which is approximately 4 per cent of your take home pay. There are currently no maximum restrictions.


Unfortunately being self-employed means you do not have an employer making contributions into your pension on your behalf or even choosing where your pension is held so it is important to do some thorough research before choosing where to open your pension scheme. The Pension Advisory Service recent research found that less than a third of self-employed people are paying into a pension.

The government scheme NEST isn’t just for employees. The guidance from NEST is that you can usually join if you’re self employed. To check your eligibility and start saving, visit the self employed page  on NEST’s website.

Although you do not get employer contributions you do get some tax breaks, for example you are entitled to tax relief on your contributions. If your a basic-rate taxpayer, this means you’ll get an extra £25 for every £100 you pay in, when you come to do your tax return.

I hope you find this article interesting and if you require payroll services including pension provision then please contact us by email at



How do childcare vouchers work for a child-minding setting?

When setting up your childcare setting there are many things you need to take into consideration; the location, how many staff you may or may not require, how many children you can legally accept and are there any alterations to the setting required. But you also need to think about how you will get paid.


Most childcare settings are set up so that parents can either pay via cash, bank transfer or even through childcare vouchers. But how does this work for childminders?


Childcare vouchers have been made available through a parents’ wage packet to provide benefits to both the organisation and the parent. While the parent can make savings in the amount of provision they pay for – up to £1,000 in some cases thanks to the vouchers being exempt from NI and tax – the childcare setting accepting them know they are guaranteed payment, so long as they are registered or approved.


By being a registered childminder (eg CSSIW, Ofsted & Care Commission) you will be eligible to become affiliated with one of the many childcare voucher companies available. Once you have this system in place you should advise the parents or guardians of the children in your care which voucher scheme you have signed up with. If you only have a few families it may be worth discussing it with the parents first so you can make sure you sign up to a scheme that their employer works with.


In the first instance you would need to inform the parents your account or reference number from the childcare voucher company. You do not need to give them your bank details, unless the voucher is only part payment for your services.


Once everything has been set up between you, the affiliate, the parents and their employer, you can start accepting vouchers. These are usually paid via a bank transfer however in some cases you may receive a physical voucher that will need to be redeemed either by post or online.


Depending on which voucher provider you have chosen you should receive a direct bank transfer (BACS) or cheque, usually within 4 working days after the parent has requested the payment. It is imperative for your business records that you keep full records of all payments, vouchers and parents information for future reference.


Sometimes you may receive a payment for more money than is required for that month’s contracted childminding hours. If this is the case you can either reduce the amount from the next month’s quota or ask the voucher company to carry the amount forward as a credit on their next month’s invoice. You can also arrange a refund back to the parents.


As with all financial aspects of a business you must keep clear records, especially for tax return purposes. If you are a childminder and not sure what you should or shouldn’t keep, or if you are struggling with the financial requirements of being a childcare provider, contact us for an informal chat about your accounting needs. We offer a range of services that include accountancy, tax and pensions.

What should childcare providers be keeping for accounting purposes?

All businesses need to keep information for accounting purposes – especially when putting together their end of year tax returns. But what does and doesn’t need to be kept? We’ve put together a handy guide to help you whether you’re a large nursery or self-employed childminder.


Childminding is different to other forms of childcare provision as it is a service you are providing in your own home. You will already have had your Ofsted inspection and, once approved, can start putting your paperwork in place.

As you are working in your own home you will need relevant public liability insurance. There are many companies that specialise in childcare settings and will be able to assist you in making sure you have the correct, legal cover for your home. As with all paperwork, you must keep copies of the certificate for 6 years from the end of the last financial year.

You will also have to register yourself as self-employed which means you will have to prepare your own tax returns, which in turn will let you know how much income tax and national insurance – if any – you will need to pay. For your tax returns you need to make sure you keep records of everything you have to pay for, including insurances, toys, food, drink and business mileage if required. As you are working from your home setting you can also claim for a share of your household bills including your heating, lighting, water and council tax.

You can also make a claim for milk payments if the child/children are under 5 years old, or formula if they are under 12 months.

If you have any children coming to you that require local authority payments you must also keep all records. The same applies to any childcare vouchers you receive as well as bank transfers and cash. Childcare fees in are just as important as expenditure purchase invoices or till receipts so any payment you receive regarding a child in your care must be kept with full information of who paid the money, how, when and how much.

Creches and Nurseries

If you are running a crèche or nursery the paperwork you have to keep is very similar to that of a childminder. As well as all the payments coming in and the costs of running your setting – heating, rates, rent, food, equipment – you must also keep records of insurances, staff wages – including NI and tax payments, training course fees and visitor costs – such as a sign language tutor or a children’s entertainer.

You would also need to keep all your paperwork when dealing with a parent or guardian, the local authority or any other company that you deal with.

As with childminders, you must keep all paperwork for 6 years from the end of the last financial year. Paperwork must be kept secure and you must be able to

have easy access to it.

Many childcare providers do not feel they have the time or the experience required for keeping all their paperwork together and this is where companies such as ourselves can step in. We can provide an accounting service that covers everything – including tax returns, pensions, wages – or we can provide one off services such as putting together your tax return. Contact us today for more information on what would work best in your setting.