The CIPP are delighted that there will be no mandatory role to play for the employer or payroll practitioner with the operation of Tax–Free Childcare. However, we do welcome government recognition of the vital role that employers and the payroll industry already play in the current operation of tax efficient Employer Supported Childcare schemes We also welcome the proposal that the design of the Tax-Free Childcare scheme will have no impact on the existing rules around the provision of work place nurseries, which provides a measure of consistency for affected employers and we are grateful for that early confirmation. Experience tells us that employees will turn to their employers, generally through the professionals that process their pay, on occasions when they are unclear about the tax and benefits system, so we also value the thought that has gone in to ensuring that employers, who wish to remain involved, can do so, but we are concerned that enthusiasm to keep the employer involved could easily result in confused guidance being issued to the employer community running the risk of diluting the non mandation message.
Thank you to those members (27) who took the time to respond to our survey. Members can read the full response to this consultation through our news pages .
Tax-Free Childcare – consultation outcome
19 March 2014
The government has published their consultation response to the design and operation of the new Tax-Free Childcare scheme due to launch in autumn 2015.
The Policy team will scrutinise the 87 page document and provide further comment shortly but in the interim the response includes the top ten things to know about the scheme:
1. The scheme will launch in autumn 2015
You’ll be able to open an online account, which you can pay into to cover the cost of childcare with a registered provider. This will be done through the government website, GOV.UK.
2. For every 80p you or someone else pays in, the government will top up an extra 20p
This is equivalent of the tax most people pay - 20% - which gives the scheme its name, ‘tax-free’. The government will top up the account with 20% of childcare costs up to a total of £10,000 - the equivalent of up to £2,000 support per child per year.
3. The scheme will be available for children up to the age of 12
It will also be available for children with disabilities up to the age of 16, as their childcare costs can stay high throughout their teenage years.
4. To qualify, parents will have to be in work, earning just over an average of £50 a week and not more than £150,000 per year
The scheme is designed to be flexible for parents if, for example, they want to get back to work after the birth of a child or work part-time.
5. Any eligible working family can use the Tax-Free Childcare scheme - it doesn’t rely on employers offering it
CIPP Policy News Journal
16/04/2014, Page 156 of 519
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