There have been a lot of articles in the news recently around the Governments plans to help parents with the cost of childcare.

03 June 2015

The previous coalition government announced its intentions to offer parents a new form of help with their childcare from Autumn this year, called Tax Free childcare (TFC). 

Although a definite date for the launch of TFC still has not been set, understandably a lot of parents are beginning to wonder how the introduction will impact on their childcare costs and plans.

If you are an employee who currently benefits from the savings possible with childcare vouchers, you can continue to take vouchers via your gross salary, as long as you stay with your existing employer.   You can use childcare vouchers to pay for all forms of registered childcare from birth up to the age of 15 so this covers fees at a nursery, childminder through to costs of a breakfast club, after-school club or summer holiday clubs.

Once TFC  is launched all new parents will not be able to take childcare vouchers and will only have the option to use TFC.

TFC works in a completely different way to childcare vouchers:

  • the help will only be available to parents where both parents are working
  • it isn’t run through the employer but requires parents to log into a government website every 3 months and make a payment to a government agency which is then topped up.
  • Despite much government hype, the new TFC scheme is only reckoned to save parents around £600 a year, compared with up to £1866 with childcare vouchers.
  • it is important to note that once it comes into effect, all new parents who haven’t yet signed up to the childcare voucher benefit wont then be able to use vouchers.

With childcare vouchers, both the parent and the chosen carer(s) have online accounts where all payments can be viewed.  This makes it very easy for carers to assisgn payments to the correct parent.  This is essential for all childcare providers who are there to look after children and not chase payments! As yet though we still dont know how the governments new benefit will work in this regard.

How will carers identify payments coming into them?

How promptly will payments be to the carers?  

Who will get charged for payments to be made to the carer?  

There are a lot of questions still unanswered and so we would recommend that all parents sign up to the childcare voucher scheme provider by their employer now, so that they then have the choice of childcare vouchers versus the new scheme, whenever it is launched, or they ask their employer to start offering childcare vouchers now! 

For more advice or to set up the childcare voucher benefit, please call us on 0800 088 7315 and speak to a member of our Client Team.

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