Working out which forms of workplace childcare support you can claim is confusing, of that there is no doubt.
It doesn’t help, at least in the short term, that there has been a recent transition from Childcare Vouchers to Tax-Free Childcare, or that despite that transition the old scheme still remains. Of course, you might not be sure what either is or how they differ and we will come on to those questions.
And, perhaps to make matters a little more complicated, you then have Workplace Nursery Schemes.
How is a poor parent meant to know what to choose? If they choose the wrong scheme for them how much might it cost in terms of missing out on potential financial support?
Let’s have a look through a few common questions and also how you can benefit from more than one scheme in some cases – more on that towards the end of this page.
What Are Childcare Vouchers
We’ll start with these as we can largely skip over them. If you are not currently on the Childcare Voucher Scheme you cannot join as it was closed to new entrants in late 2018.
These vouchers were administered by employers and as such were not universal, instead relying on employers offering the scheme.
Anyone currently receiving Childcare Vouchers can remain in the scheme as long as they stay with the same employer and that employer continues to run it.
Let’s have a look at the scheme that’s replaced these vouchers
What is Tax-Free Childcare
While Tax-Free Childcare (TFC) has replaced Childcare Vouchers, it is not a simple like-for-like.
TFC is government-run and so there is no employer involvement, it also has a lower upper age limit of 12 as opposed to 16 (an upper limit of 17 for disabled children remains).
Unlike Childcare Vouchers, TFC also cannot be used if you are in receipt of Universal Credit or Tax Credit.
It is natural to wonder whether you are better or worse off under Childcare Vouchers or TFC, even if you might no longer have the option to join the voucher scheme.
Childcare Vouchers v Tax-Free Childcare – Which Scheme Would I Have Benefited More From?
There are a few clear cases where people were better off with the old Childcare Vouchers scheme as opposed to Tax-Free Childcare, including any parents wishing to use a scheme for children over the age of 12. That simply isn’t an option with TFC (with the exception of parents to a disabled child).
The easiest way to check, rather than worrying about near-endless permutations, is to use the online calculator, this will help you see how childcare savings would be different under the two options (even if one of the options is one you can no longer sign up to).
Workplace Nurseries – Where It Gets Interesting
Workplace Nursery Schemes can help parents save many thousands of pounds per year.
Average nursery fees in the UK are around £850 a month, by using a Workplace Nursery Scheme a basic rate taxpayer would save around £2,500. A higher rate taxpayer would save more than £3,500.
In London, where average fees are well over £1,000 per month, these savings increase to around £3,300 for those paying the basic rate and approaching £5,000 for anyone on the higher rate.
Enjoy Benefits Workplace Nurseries
We have full details on how Workplace Nurseries work on our dedicated site, but the basic detail is that they work by an employer working in partnership with a nursery.
The nursery has spaces for employees’ children, and they then get paid directly out of salary deductions. The days of chasing payments are gone.
The business makes payments to the nursery through NI savings, these being used as the nursery sees fit in discussion with parents.
That’s a great benefit of this scheme, parents with children at the nursery not only save money, they also get an input into what additional funds get spent on – it might be learning resources, or making outside space more enticing for the children.
Set up through a company such as Enjoy Benefits, there is no admin for the company offering a Workplace Nursery Scheme to employees, there is also no expense. There is simply a great benefit that helps employees save a small fortune on childcare costs.
Click here to complete the enquiry form or call us on 0800 088 7315. We will send you an information pack in PDF format. This contains extensive information on the Workplace Nursery Provision and how it could benefit both company and employees.
Using More Than One Scheme
For any one child, you can only use one scheme for the same bill. So if you had a child at nursery benefiting from the Workplace Nursery Scheme you can’t also pay partly with the Tax-Free Childcare for them. However, if you had an older child in school, you can use TFC towards their costs and WNP towards the nursery child.
The only schemes you cannot combine are Tax-Free Childcare and the Childcare Voucher scheme, but you can combine either of those with our Workplace Nursery Scheme.
A younger child might be at nursery and so perfect for the Workplace Nursery Scheme, but what of an older child who perhaps just needs childcare during the school holidays, or after school on certain evenings.
Workplace Nursery Schemes are often the best option for parents with children of nursery age.
Why not get in touch with us for a chat, we can also send you through some key information.
If you are an employee, you can see which options are available and, if necessary, politely suggest your employers set up a scheme.
For employers, running a workplace nursery scheme really is straightforward and it is a benefit of huge benefit to employees and one that is likely to lead to increased staff retention. It also leads to savings for you as can be seen in our calculator.
Get in Touch
To discuss setting up a Workplace Nursery Scheme, please get in touch with us by calling us on 0800 088 7315 or through our contact page. We also have a dedicated website focussing on workplace nursery schemes, how they run, how to set up and the savings available.