There will be changes to childcare vouchers from 4 October this year. The government’s decision to close the childcare voucher scheme was announced in March 2018, and following a 6-month extension of the scheme, as of now the Childcare Voucher scheme is due to close to new entrants on 4 October. This means you need to make sure to join a childcare voucher scheme on or before this date to offer your employees childcare vouchers as an attractive employee benefit.
Childcare vouchers are an employee benefit offered by employers to help with approved childcare costs, for example a staff nursery. Employees can take up to £55 a week of their wages as childcare vouchers, which they don’t pay tax or National Insurance on. Per year, this adds up to around £1,000 that each parent can save on childcare costs. For businesses – offering childcare vouchers instead of offering to cover childcare costs for your employees can save the company up to £402 per year per parent.
Changes to childcare vouchers
On 4 October 2018, childcare voucher schemes will close to new applicants. This means that employers who want to offer their employees childcare vouchers as an employee benefit must join a childcare voucher scheme and have the relevant salary sacrifice arrangements in place before the first payday before this date. For employers paying their employees by the end of each month, it means that you have to join a scheme and make arrangement with your employees before you run your September payroll.
The changes only apply to new applicants, and will not have an effect on companies and employees already registered on a scheme. Employees of companies who join the childcare voucher scheme before 4 October can keep getting vouchers as long as they stay with the same employer and the employer continues to run the scheme, and they don’t take an unpaid career break of longer than a year.
Offering benefit schemes such as childcare vouchers is a way to attract employees, as it can cover living costs without incurring any tax for the employee. It can also save your business money, so it’s worth having a look at joining a childcare voucher scheme now before it is too late!
Goodwille can guide you through the changes to childcare vouchers and the effects this might have on you, your employees and your business. We can also help you with joining a childcare voucher scheme, and other employee benefit schemes, as well as give instructions on what YOU can do to put pressure on the government to keep the childcare voucher scheme.
Get in touch with us today if you want to know more.