7 September 2017
As you are already aware childcare vouchers are a method of paying registered childcare. It is a form of salary sacrifice, meaning that an employee may ‘sacrifice’ part of their pay in exchange for childcare vouchers. The vouchers are exempt from Tax and National Insurance Contributions and therefore offer potential savings for working parents who use registered childcare.
As of April 2017, the Government has rolled out a new scheme called Tax -Free Childcare which allows parents to apply for payments that cover up to 20% of their childcare costs. This scheme is not administered by employers. With the introduction of this new scheme any employer who offers childcare vouchers will not be able to process any new entrants as of April 2018. Parents who joined the scheme prior to April 2018 can remain beyond this date for as long as required.