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Closure of childcare vouchers Despite the lobbying to keep childcare voucher schemes open to new entrants, there has been no further extension from government. So, from 4 October 2018, new entrants can no longer join a scheme and receive the associated tax and NICs reliefs.
employees before the review takes place. In August 2018, the Business, Energy
contribution of £500 every three months equating to £2,000 per child per year, or £4,000 for disabled children. Parents can use this to pay for regulated childcare. Further information and a calculator, to help parents understand what government help they might be entitled to, can be found on the Childcare Choices website. Toolkits including email templates and leaflets are also available on the Childcare Choices website to help you communicate information about tax-free childcare to your employees. ● Employers can pay into their employees’ account – Employers can pay directly into an employee’s childcare account(s), either as a one-off bank transfer or by setting up a regular payment. To pay into a parent’s account, the employer will need: m the account sort code of 60 89 71 (applies to all accounts) m the account number of 10027165 (applies to all accounts) m the parent’s unique thirteen-digit childcare account number as the payment reference, which the employee will be able to provide. The employer must make all payments individually. They cannot send HM Revenue and Customs (HMRC) a bulk payment with a list of parent childcare account numbers and then ask HMRC to distribute that money appropriately. Employers paying into their employee’s account must deduct income tax and NICs and pay employer NICs on any money they pay in. If the employer pays money into their employee’s childcare account by mistake, the employee can choose how to repay this if he or she has agreed to do this. Any payment back from the employee must not offset the employee’s income tax and NICs, or offset your employer NICs. n Guidance etc HMRC has produced detailed guidance and support materials for employers to share with employees around any questions and issues that may arise; all of which have been published through our news pages – just do a ‘childcare’ search and you will easily find them. If you would like any further information about the closure of vouchers or tax-free childcare, you can email HMRC at tax-free.childcare@ hmrc.gsi.gov.uk.
and Industrial Strategy Committee published its thirteenth report on
closing the gender pay gap (https://bit. ly/2LR2D7p), calling for a widening of the present reporting requirements including extending reporting requirements to equity partners and company subsidiaries with fewer than 250 employees. The Treasury Committee’s response to this report (by John Glen, economic secretary to the Treasury, and Victoria Atkins, minister for women) states that it is important to recognise that the regulations are still in their infancy, with organisations having only just completed the first year of reporting. The response said that the legislation itself is ground-breaking, with no other country asking for this level of transparency, but they will review it in five years. The government believes that this is an adequate timeframe after which they will be able to properly evaluate the regulations and their impact. disappointing it is that the government has rejected their calls to widen the requirements as recommended in their report. She commented: “Addressing the gender pay gap is in the interests of ensuring a more equal society, so we will continue to put pressure on companies to comply with the spirit as well as the letter of the law to ensure that the reported data is meaningful and properly highlights the low number of women in high paid jobs.” The thirteenth report also included recommendations for the gender pay gap reporting regulations to be amended to require more detailed statistics such as changing the salary quartiles to deciles. Also recommended was that organisations should be required to provide some narrative with an action plan setting out how gender pay gaps are being and will be addressed (with objectives and targets). The response included no mention of these areas so unless we hear otherwise we can assume that reporting will continue with the same requirements and methods for year two as it did in year one. Any change to regulations should require consultation so we will keep the payroll profession informed accordingly of any possible changes in the future. Rachel Reeves MP, chair of the Committee spoke out about how
...must deduct income tax and NICs and pay
● What you will need to do as an employer – As long as you continue to offer your voucher scheme, employees who joined with the relevant changes made to their wage before 4 October 2018 will still be able to use it and receive the associated income tax and NICs reliefs. You will continue to receive employer NICs relief for those employees. If you continue to offer your voucher scheme and employees join after 4 October, you will need to deduct income tax and NICs on any vouchers given and pay employer NICs. However, if these employees meet the tax-free childcare eligibility criteria, they will also be able to open an online tax-free childcare account. You must stop giving childcare vouchers with income tax and NICs relief to employees who join before the 4 October if they wish to leave the scheme and start using tax-free childcare. If this means stopping or changing a salary sacrifice arrangement, you must also update your employee’s contract and your payroll software. ● Tax-free childcare – Tax-free childcare was introduced in 2017 to help working parents (including those who are self- employed) with the cost of childcare. To be eligible, parents (and their partner if they have one) must earn at least the equivalent of sixteen hours per week at the national minimum wage, have an eligible child (under twelve or seventeen if disabled) and earn under £100,000 each per year. Eligible parents are able to apply and open a childcare account online. For every £8 families pay in, the government will pay in £2, up to a maximum government employer NICs on any money they pay in
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| Professional in Payroll, Pensions and Reward |
Issue 45 | November 2018
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