Closure Of The Childcare Voucher Scheme On 4th October
How is it going to affect your employees?
POSTED BY ROGER EDDOWES ON 23/07/2018 @ 8:00AM
As of 4th October 2018, the Childcare Voucher Scheme will be closed to new applicants. So, what's replacing it and how will it affect your employees going forward?
Do ensure your employees are aware of the closure of the Childcare Voucher Scheme!
copyright: leaf / 123rf stock photo (licensee)
Currently, employees are able to take up to £55 of their wages each week in childcare vouchers. This means they have a tax-free sum to spend with Government approved childcare providers.
"The vouchers can be used for registered childminders and nurseries!"
However, from October, the childcare voucher scheme is being replaced with a new tax-free childcare scheme. This means employees can receive up to £500 every quarter directly from the Government.
To be eligible, they need to earn minimum wage for 16 hours a week or more and take home no more than £100,000 per year. Employees can apply directly via the Government's website.
So, you should inform your employees that although new applicants will not be allowed to register after 4th October, they can still join the childcare voucher scheme before that date provided they receive their first vouchers before the cut-off date. This means you will need to maintain the existing system for those already registered.
They should be made aware that they can swap to the new tax-free childcare scheme if they wish but must inform you within 90-days. Each employee will need to decide which one suits them better. Once they change over, they can't go back if they find it less convenient.
"So do let your team know about this important change so they can decide what to do!"
If you'd like to find out more about the changes to the Childcare Voucher Scheme and how it affects your employees, do give me a call on 01908 774320 or click here to ping me an email and let's see how I can help you.
Until next time ...
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Roger trained at Edward Thomas Peirson & Sons in Market Harborough before working at Hartwell & Co, followed by Chancery, as a partner. He started Essendon Accounts and Tax with Helen Beaumont in 2014 as a general practitioner with a hands-on approach.
Roger loves ‘getting his hands dirty’, working with emerging, small-to-medium and family businesses to ensure they receive the best possible accountancy advice. Roger utilises an extensive network of business contacts to leverage the best guidance and practical solutions.