This will allow more time for Tax-Free Childcare to bed in, for awareness to increase and for families to understand the support they can receive under the scheme. Now that Tax-Free Childcare is fully rolled out, the government will keep it under review to ensure it is delivering the support needed for working families.” The Low Income Tax Reform Group (LITRG) also provide guidance for working parents on getting help towards the costs of childcare and have recently highlighted their concerns about current guidance available to working parents, “we do not believe the government is providing enough guidance or support to help people navigate the system in order to choose between the schemes and understand how they interact”.
Geographical extent: Tax free Childcare is UK wide. Childcare offers will vary across devolved nations - 30 hours free childcare is in England only
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Childcare voucher and directly contracted childcare schemes 18 May 2018
HMRC has provided an update regarding the announcement that employer supported childcare schemes are to remain open to new entrants for a further six months, until 4 October 2018.
“On 13 March the Government announced that the employer supported childcare schemes, namely childcare vouchers and directly contracted childcare would remain open to new entrants for an additional 6 months, until 4 October 2018. We recognise that this decision may have created some practical difficulties for some employers. As an employer, you can continue to allow your employees to join your childcare voucher or directly contracted childcare schemes up until 4 October 2018 (as long as they have joined a scheme and received their first voucher by that date). This means that you and your employees can keep taking advantage of the income tax and National Insurance reliefs.
However, we understand that some employers may have closed their scheme to new entrants on 5 April 2018, (the date originally stated), and it may be challenging to re-open it for the 6 month extension.
Any scheme which has tax and National Insurance contributions advantages must normally be open to all employees. As a temporary measure, we will use our collection and management powers to allow the tax and National Insurance contributions advantages to continue for employees enrolled in a childcare voucher - or directly contracted childcare scheme - on or before 5 April 2018; even where employers choose not to re-open their schemes.”
CIPP comment We have asked HMRC exactly how this will work in practice; we await their response and will keep you informed.
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Treasury Committee ask for continued use of childcare vouchers 27 June 2018
The Chair of the Treasury Committee has written to the chief secretary of the Treasury to convey the Committee’s disappointment with the government’s response to some of their recommendations.
On 25 March2018 the Treasury Committee published its Ninth Report of Session 2017–19, Childcare which included recommendations regarding Tax-Free Childcare (TFC) replacing childcare vouchers and the need to properly understand the impact their removal will have on certain families.
Recommendations and comments from the Committee included:
The Chartered Institute of Payroll Professionals
Payroll: need to know
cipp.org.uk
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