Childcare Vouchers due to close to new entrants from April 2018

The Childcare Voucher scheme enables employees to exchange part of their monthly salary for Childcare Vouchers. This is known as salary sacrifice and the maximum allowed is £243 per month.  The amount sacrificed is exempt from tax and National Insurance Contributions (NIC) resulting in employees saving up to £933 per year, per parent. Employers are also exempt from their NIC on the amount sacrificed by each employee which reduces their payroll bill.

The Childcare Voucher scheme is due to close to new entrants in April 2018. The information below outlines what you need to know whether you are a parent or an employer. You will also find out more about our lobbying campaign to keep Childcare Vouchers open alongside the Government’s new scheme Tax-Free Childcare, so families can continue to choose the best option for them.

Important Notes For Parents

Only parents who are already using Childcare Vouchers when the scheme closes can continue to benefit from it.

This means working parents who think they could benefit from using Childcare Vouchers to save on registered childcare costs need to join the scheme as soon as possible. Parents can do this by making a salary sacrifice from their pay prior to the closure date – no later than March 2018.

Important Notes for Employers

Once the scheme closes to new entrants in April 2018, only employers who already offer the scheme will be able to continue doing so.

For those employers who already offer Childcare Vouchers, you will not be able to accept new employees on to your scheme after April 2018.

We have a webinar recording highlighting implications for employers, as well as a checklist of what you need to think about before the scheme closes.

 

Lobbying to keep Childcare Vouchers Open

Employers For Childcare has been lobbying Government for Childcare Vouchers to be kept open to new entrants beyond April 2018 so that new parents, or those who change jobs or whose circumstances change, can continue having the option of benefitting from the scheme. This is critical, as 66% of callers to our Family Benefits Advice Service are better off on Childcare Vouchers or Tax Credits, or the combination of these, rather than Tax-Free Childcare.

A Petition calling on the Government to keep Childcare Vouchers open to new entrants received over 116,000 signatures from across the UK. As a result, a Parliamentary Debate took place on Monday 15 January 2018 during which MPs raised concerns to Government.