Are you aware of changes to your childcare support in 2017?
The changing childcare landscape over the last couple of years means that parents are facing big changes to the way childcare support is provided, which will undoubtedly have financial implications on many UK families. If you’re still confused about what childcare support will be available to you in the coming years, here is a short guide to the options and an overview of what’s changing:
Childcare vouchers
Since 2005, employers have provided parents with childcare vouchers through salary sacrifice schemes, helping hundreds of thousands of working parents save up to £933 a year on tax and National Insurance on their childcare costs. Often, both parents sign up to the scheme, achieving annual savings as high as £1,866 per family. Childcare vouchers will only be available to new joiners until April 2018 following the introduction of Tax-Free Childcare in 2017, therefore parents need to find out which scheme will be most beneficial. Why not try the Childcare Savings Calculator?
Tax-Free Childcare
Most people heard about Tax-Free Childcare a few years ago when the coalition government announced it as a means to return parents to the workplace. It was expected to launch in autumn 2015 but, due to a dispute over the tendering process, it was delayed by a court order until a case to settle the matter was heard. In July last year, the Supreme Court lifted the order, and the government announced a launch in early 2017. In the government’s most recent Budget, a staged rollout has been confirmed, with the plan to make Tax-Free Childcare available to all qualifying families by the end of 2017. To support the transition between the two schemes, the current childcare voucher scheme will now remain open to new joiners until April 2018, giving parents more time to sign up.
Tax-credits
Parents have long relied on tax credits, but it was announced in the July 2015 Budget that after April 2017 they will be limited to the first two children for new claimants. This has received a mixed reaction from parents and experts, with many already concerned about the impact it could have on their families.
Free childcare
Also making its journey through parliament is the Childcare Bill. In 2017 the government is proposing to increase its free childcare entitlement from 15 to 30 hours a week for three and four year olds where both parents work and earn, on average, the equivalent of 16 hours’ pay per week and less than £100,000 per year. A £13m pilot of the scheme is due to launch in September 2016, within eight local authority areas. These include Hertfordshire, Newham, Northumberland, Portsmouth, Staffordshire, Swindon, Wigan and York. The details of how this will be implemented are yet to be confirmed.
The past couple of years have seen several unknowns concerning the future childcare landscape, many parents still unaware that the Tax-Free Childcare is being implemented at all and that childcare vouchers will be gradually phased out. Find out more about Tax-Free Childcare here >