23rd August 2018
Employers regularly offer the childcare voucher scheme as a way of supporting parents within their organisation. The tax-free scheme has long been popular with working parents, allowing eligible individuals to earn up to £55 per month in childcare vouchers by way of salary sacrifice. However, given the forthcoming changes, there are some things you should consider.
You may continue offering the current scheme to eligible staff, however, it will only be available to those who sign up before October 4th, 2018. From this date onwards, any new applicants will only be eligible for the government led programme which requires no involvement on your behalf. This new scheme instead asks individuals to deposit funds into an account on the HMRC website, and the government will also contribute up to £2,000 per child per year.
Alternatively, you may take this opportunity to cease your involvement in the employer-led voucher scheme altogether, as this is totally voluntary, in an effort to make things more equal for all staff. However, you should consider how this will be received by those who currently benefit from it, particularly if this forms part of an attractive benefits package.
Whichever way you decide to proceed, it is important that you inform your employees appropriately, using a combination of emails, promotional posters, and informal meetings. If you plan to continue offering the scheme you should encourage interested staff to apply as soon as possible, as they must have received the first set of vouchers prior to the cut-off date if they are to be able to use the scheme.
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