From 5 October 2018, childcare voucher schemes will be closed to new applicants.
Previously the government intended to close the scheme to new applicants from 5 April 2018, but this has now been extended by six months.
Where an employer offers a childcare voucher scheme, individuals who have a parental responsibility may be able to agree with their employer to sacrifice a proportion of their salary in order to receive childcare vouchers (which are not subject to income tax and national insurance), to utilise against the provision of qualifying nurseries, childminders, clubs and play schemes.
Basic rate taxpayers are able to receive up to £55 childcare vouchers per week. Lower levels apply to new entrants who are higher rate and additional rate tax taxpayers, who are able to receive childcare vouchers up to £28 and £25 per week respectively.
Currently, new applicants are able to review and decide if the childcare voucher scheme or the alternative system of help paying for childcare; Tax-Free Childcare, is best for them.
However, post 4 October 2018 individuals who have not entered into a childcare voucher scheme will only be able to utilise the Tax-Free Childcare scheme.
If you would like to discuss please call Richard White on Rugby 01788 539000 or Amy Read on Leicester 0116 261 0061.