The House of Commons Library has also produced a briefing paper ‘ Childcare vouchers and Tax-Free Childcare - FAQs ’ which provides an overview of the Childcare Vouchers and Tax-Free Childcare schemes and a comparison of their key features. It explores the ‘winners and losers’ under each scheme, considers how the schemes interact with welfare benefits, and outlines some other sources of help with childcare costs.
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Existing Employer Supported Childcare closed to new entrants from 6 April 1 February 2018
Following a parliamentary debate about the future of childcare vouchers, we can confirm that existing Employer Supported Childcare (ESC) will still be closed to new entrants from 6 April 2018.
In order to access Employer Supported Childcare as a new entrant before the April 2018 cut-off, a parent will have to have received their first voucher by 5 April 2018. The act of making an application would not be sufficient and is not recognised in legislation.
GOV.UK guidance has been updated to reflect this:
“Changes to childcare vouchers
From 6 April 2018, childcare voucher schemes will close to new applicants. You may be able to get Tax-Free Childcare instead.
You can keep getting vouchers if you’ve joined a scheme and get your first voucher by 5 April 2018, as long as: you stay with the same employer and they continue to run the scheme you don’t take an unpaid career break of longer than a year
If you get Tax-Free Childcare
You can’t continue to claim childcare vouchers if you successfully apply for Tax-Free Childcare. Which scheme you’re better off with depends on your situation. Use the childcare calculator to work out which type of support is best for you. You must tell your employer within 90 days if you get Tax-Free Childcare. They’ll then stop giving you new vouchers. You can continue to use any vouchers you already have, including to make a joint payment for childcare with Tax-Free Childcare. There’s no deadline for using your vouchers.
Once you’ve told your employer that you’re getting Tax-Free Childcare, you can’t rejoin their voucher scheme.”
The updated guidance on GOV.UK is available here - Help with childcare costs/childcare vouchers .
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Tax-Free Childcare opens to all parents with children under 12 19 February 2018
From 14 February 2018 Tax-Free Childcare (TFC) opens to all remaining eligible working parents with children under 12 can apply for up to £2,000 of childcare support per child, per year (up to £4,000 for disabled children).
HMRC has been gradually rolling out Tax-Free Childcare since April 2017 and now all eligible parents can apply.
For every £8 parents pay into their childcare account the government will add an extra £2. Once eligible parents have opened their new account they can start paying their childcare provider straightaway, using the government contribution.
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