An item in the latest Employer Bulletin about parents in receipt of Employer-Supported Childcare who opt to come onto Tax-Free Childcare raises a few questions.
Role of employers in Tax-Free Childcare When a parent in receipt of Employer-Supported Childcare (childcare vouchers) opts to come onto Tax-Free Childcare, they will need to provide their employer with a Childcare Account Notice (CAN). This is a written document (which can be an email) stating that they wish to leave their employer’s voucher scheme and use Tax-Free Childcare. A parent will have 90 days from opening their Tax-Free Childcare account to give their CAN to their employer. At this point the employer will need to terminate their access to Employer-Supported Childcare. Employers are able to continue to support their employees with the costs of childcare, if they wish to, by paying into their parents’ childcare accounts. However, any contributions will have to be in accordance with income tax and National Insurance rules.
CIPP comment This prescriptive text about an exit strategy from ESC raises some questions which we put to HMRC’s TFC implementation team.
90 day window - this provides an employee with effectively three months of both ESC and TFC? Does that impact on their ability to return to ESC before April 2018 if TFC doesn’t work for them?
It is intended that the CAN process will be as light touch as possible and will allow employees a 90 day period to exit ESC after claiming TFC. The CAN notice is simply a written document (letter or email) informing the employer that they no longer want to receive ESC. The parent is informed of this process through an output when they sign up to TFC.
Once a parent provides a CAN notification to their employer, they will not be able to return to ESC. Voucher providers have been highlighting this to parents on their schemes.
A range of communications materials for employers and employer groups regarding the interaction between ESC and TFC have been developed, which includes toolkits, leaflets, FAQs, and these will be distributed shortly.
Issues with Childcare Service We are also hearing from members at the national Forums that early experiences of using the Childcare Service have thrown up many challenges and frustrations. As with any new digital service the Childcare Service has been launched in Beta mode (trial mode) and is being updated with system fixes, solutions and improvements on a regular basis. If you don’t instantly get a connection when you follow the link, give it a moment or two and then refresh the page in your web browser – not a guaranteed solution but it may remove the need for you to call the helpline on 0300 123 4097. Helplines are also available in the Welsh language on 0300 123 8124 or by Minicom for the audio impaired on 0300 123 9232.
And we at the CIPP Policy team would value hearing about your experience with this delivery of new policy; your emails to policy are encouraged. Thank you.
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Eligible parents should apply early for 30 hours free childcare 9 November 2017
HM Government is encouraging eligible working parents of three and four year olds living in England to apply for their 30 hours of free childcare as soon as possible, ideally pre 30 November 2017.
HMRC sometimes needs more information to check whether a parent is eligible so not all parents can get a code straight away, hence the encouragement to apply as soon as possible.
Existing parents should remember that they must reconfirm their eligibility for 30 hours every 3 months.
HMRC has produced a new parent communications toolkit , to provide further information to parents about 30 hours and Tax-Free Childcare. The toolkit includes information on:
The Chartered Institute of Payroll Professionals
Policy News Journal
cipp.org.uk
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