If you haven’t already heard, there are some big changes being made to Childcare Vouchers, so you may want to read to find out what if this affects you!
As of April 2018, Childcare Vouchers are being scrapped and employers and employee’s will no longer be able to join the voucher scheme. This is because it is being replaced by ‘Tax Free Childcare’ which means eligible families can get 20% of their annual child care costs completely free from the government.
This change also brings new eligibility rules, these being that individuals must:
- Have one or more children under the age of 12 years old (17 if disabled)
- Work at least 16 hours per week
- Need to be working (both if in a couple) and earning £115 per week / earn under £100,000 per year (this applies to both individuals if in a couple)
- Not be claiming Tax Credits (this includes an element of Working Tax Credits) or Universal Credit
- Not receive any other support with childcare, including from a childcare voucher or salary sacrifice
Even though it’s a big change to the system, the changes that have been announced could work in many peoples favour. If eligible, for every £8 you put in, the government will put in £2, this could mean you could receive up to £2000 per child per year in tax free child care.
Another positive of the new scheme as it doesn’t just cover employee’s who’s employer have offered the scheme, the Tax Free Child Care is also available to self employed individuals who also earn under £100,000. So if you work for yourself, you can now benefit from the government scheme.
Now, if this isn’t for you and you do prefer the old Childcare Voucher system, as an employer you still have time to offer the old scheme and employee’s will have time to sign up but again only until April 2018 so if this is the case, get signed up asap! If you are already part of and have employee’s signed up on the old scheme, nothing will change and you can continue this for as long as you want to.
For any further advise on this, just give us a call, we’re happy to help!