With so many deadlines to cope with, it is little wonder many employers may have missed that there’s a fast approaching date for their staff signing up to the government’s Childcare Voucher scheme.
The scheme, which can save families with children aged under-15 up to £1,866 a year in tax and National Insurance, will be closed to new entrants from April this year.
So now is the time to look at encouraging employees to look at their own situation and make sure that, if it benefits them, they are signed up before it is too late.
Childcare Vouchers are being replaced by the Tax-Free Childcare (TFC) scheme. But there are strong advantages to being in the current scheme, and as long as staff sign up before the April deadline they can continue in it.
The new TFC allows single parents or couples both working to claim up to £2,000 per child aged up to 12 towards the cost of annual childcare.
The government will put £2 towards every £8 that parents transfer to a dedicated online account.
So far so good, and though some parents can be financially better off under the new scheme, there are downsides, which make the current arrangement attractive for many.
With TFC, couples with one parent not working are ineligible, so are couples where either parent earns more than £100,000, works less than 16 hours a week or receives tax credits.
And those looking to claim it must not be getting support through the existing Childcare Voucher scheme.
And once a parent has been in TFC for three months they are not allowed to revert back to Childcare Vouchers, even if their situation changes.
And that means that in some instances, such as one partner losing their job or deciding to leave work, they could find themselves ineligible for any support at all.
Experts also point out that Childcare Vouchers are more use-friendly because deductions are made automatically from gross salary.
Recent research has also revealed that few employers have raised the issue of the change and the approaching deadline with their workforce.
And given the key differences between the two schemes may have a big impact on some families now may be the time to start on a communication exercise so employees can make an informed decision.
To discuss any aspect of employee benefits please contact me on 01772 430000