Childcare vouchers are a government initiative designed to help working parents pay for childcare. You can convert part of your salary into vouchers before your usual tax and NI contributions are taken. This means that you only have to pay the tax and NI on what’s left, saving you up to £933 per year.
What’s even better is that both parents can take advantage of the scheme, so you could make a joint saving of up to £1,866 per family!
You will receive your childcare vouchers in line with your monthly pay. You can choose to receive paper vouchers at your correspondence address, or e-vouchers, which are by far the most popular choice and allow you to go online and make direct payments into your childcare provider’s bank account.
Childcare vouchers can be used to pay any Ofsted (or equivalent) registered childcare providers, which can include nurseries, childminders, nannies, play schemes, out-of-hours school clubs and holiday camps, as well as certain elements of Independent school fees.
The Childcare voucher scheme will close to new entrants from 5th October 2018, the guidelines state to be eligible to be a member of the scheme you should have had a voucher deduction before the deadline of the 5th October. To be part of the scheme you should apply by 31st August 2018 to have a voucher deduction in September 2018.
The Government have launched a new scheme called Tax Free Childcare to help support working parents with childcare costs. With Tax Free Childcare (TFC) parents have an online account, the account will be topped up by the Government with 20p for every 80p contribution from the parents, up to a maximum of £2000 per child per year. For more information or to see if you are eligible to join TFC then please visit the Government TFC website www.childcarechoices.gov.uk