Parents or their partners (if they have one) can’t get Tax-Free Childcare at the same time as claiming Working Tax Credit, Child Tax Credit, Universal Credit or childcare vouchers. They can continue to receive Working Tax Credit, Child Tax Credit, Universal Credit or childcare vouchers if they get 30 hours free childcare without Tax-Free Childcare.
Parents can visit Childcare Choices and use the childcare calculator to work out which type of support is best for them.
What happens to other childcare support? If a parent successfully applies for Tax-Free Childcare: • Working Tax Credit or Child Tax Credit stops automatically straight away • Childcare vouchers can continue for up to 90 days.
Parents need to successfully apply for Tax-Free Childcare before cancelling their Universal Credit claim.
What’s happening to childcare vouchers? On 4 October 2018, the childcare voucher scheme will close to new applicants. Employees can keep getting vouchers if they’ve joined a scheme and get their first voucher before this date, if they: • stay with the same employer, who continues to run the scheme • don’t have a break in receiving vouchers of a year or more, for instance when taking an unpaid career break. From 5 October, if an employee moves with their work under a business transfer covered by the Transfer of Undertakings (Protection of Employment) rules, the employee’s terms and conditions will remain the same. In this case, either the employee can join any existing childcare voucher scheme their new employer runs, or their new employer can start a new scheme for them, if they don’t already have one. What you need to do if your employee receives childcare vouchers and starts using Tax-Free Childcare If your employee tells you they’ve started using Tax-Free Childcare, you’ll need to stop giving them childcare vouchers. If this means stopping or changing a salary sacrifice arrangement, you must also update your employee’s contract and your payroll software. What your employee needs to do Your employee needs to tell you in writing (for example, by email) within 90 days if they get Tax-Free Childcare, so you can stop giving them vouchers. It’s the parent’s responsibility to tell you. Parents can continue to use any vouchers they already have, including to make a joint payment for childcare with Tax- Free Childcare. There’s no deadline for using their existing vouchers. Once they’ve told you they’re getting Tax-Free Childcare, they can’t re-join your voucher scheme later on. Can you pay into a childcare account? Other people, such as employers can also pay into the childcare account. You can do this using a bank transfer or setting up a standing order. If you choose to make a payment into your employee’s childcare account, you should make the payment after the deduction of any tax and national insurance contributions due.
Communicate to your employees The Government has produced materials to help you communicate the new support to your employees.
In an updated communications toolkit you can find useful email templates, leaflets, posters and social media content.
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The Chartered Institute of Payroll Professionals
Payroll: need to know
cipp.org.uk
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