Updated Big Changes, Big Choices guide: new information now available
Seek advice before switching
Employers For Childcare is urging parents to seek advice about whether they will be better off if they switch to Tax-Free Childcare for help with their childcare costs.
New information reveals that, if parents who are using Childcare Vouchers to help them with their childcare costs switch to using Tax-Free Childcare, they may not be able to change their mind and switch back, even if they find out they are worse off or are no longer eligible for Tax-Free Childcare.
What is the background?
There are big changes to the financial support available to help parents with childcare costs, and with new information now released it is more important than ever that parents get advice to ensure they make an informed choice about what support is best for them.
As previously announced, the new ‘Tax-Free Childcare’ scheme is rolling out from 28 April 2017. The existing Childcare Vouchers scheme is due to close to new entrants from April 2018, although it will remain open to those already using it.
While it will be the best option for some, not all parents will be better off using Tax-Free Childcare. In many cases, parents will be better off using Childcare Vouchers, accessing Tax Credits or using a combination of both.
In the last year, of the parents who contacted us asking whether they would be better off on Tax-Free Childcare, 31% would be better off under the new scheme. The rest, 69%, were better off using Childcare Vouchers, Tax Credits, or a combination of both.
At the start of 2017 Employers For Childcare produced a guide, Big Changes, Big Choices, to help parents understand what will be best for them. The guide includes a comparison of Tax-Free Childcare and Childcare Vouchers, some practical examples, and the answers to frequently asked questions.
What is new?
Now that the Government has provided further details on how Tax-Free Childcare will be implemented we have updated the Big Changes, Big Choices guide. Here are some of the key updates:
- If you use Childcare Vouchers, and you move to Tax-Free Childcare, you may not be able to switch back to Childcare Vouchers even if you find you are worse off. This is really important if you are considering making a switch and applies from day one of the Tax-Free Childcare Scheme, not just after the April 2018 closure of Childcare Vouchers to new entrants. Make sure you take advice and give us a call to ensure you don’t make the switch if you are going to be worse off!
- There is now more detail about how the scheme will work in practice, for example, how to use the online childcare service to manage Tax-Free Childcare accounts, make payments and confirm eligibility criteria.
- To prepare parents, the Government has launched a new Childcare Choices website. Through the site parents can pre-register for email alerts that will notify them when they can apply.
What should parents do now?
As further information is made available we will continue to update the Big Changes, Big Choices guide so make sure you check our website regularly to ensure you are referring to the most up-to-date version.
We know that working out what is best for your family can be complicated – we can help!
Employers For Childcare’s Family Benefits Advice Service was specifically set up to ensure families claim the best support available to them, particularly with childcare costs.
Call free on 0800 028 3008 to get advice from one of our Advisors and a personalised calculation setting out which form of financial support is best for you.