Wednesday, 27 March 2013

Take Advantage of The Clocks Going Forward





It may not look much like spring out there, with snow, ice and falling temperatures, however, British Summer Time officially begins on Sunday (March 31), bringing longer, lighter days and the perfect time for children to start taking part in before and after school activities again.

Over the winter, many clubs and groups without all-weather facilities may be suspended due to insufficient daylight or bad weather and working parents are often forced to arrange alternative childcare during the darker months.

With the clocks springing forward an hour, and temperatures sure to finally rise, there will be plenty of time to squeeze in new clubs or activities in the sunshine – giving children that all important fresh air until mum or dad has left work for the day.

Parents may think they can’t afford the football club or tennis lessons at school or to send their child to activity camp over the half term holiday, for example, but with childcare vouchers, they could be more reasonable than they think.

Many working parents use childcare vouchers to help fund registered childcare for the under-fives but less well known is the fact that they can also be used for school-age children to pay for out of school clubs and activity camps.

John Woodward, managing director of Busy Bees Benefits said: “As long as parents check before they book that the activity organiser accepts childcare vouchers as payment, they can give their child the opportunity to enjoy a host of fun and educational activities now that the days are longer and lighter.”

“What’s more, childcare vouchers can be saved up throughout the year and used to pay for holiday childcare and activity costs, so even if you don’t need childcare during term-time, you can still reap the financial benefits that they can offer.”



How can parents access childcare vouchers and how do they work?
  • Childcare vouchers are available to working parents via their employer. Childcare vouchers are a benefit so parents must ask their employer to provide them. The employer will save money too, so it’s worth them offering the scheme as part of their benefits package.
  • Once the employer agrees to provide childcare vouchers, the parent simply registers on the scheme, stating how much they would like to deduct from their wages each pay day in return for the vouchers.
  • Parents can currently exchange up to £243* per month.
  •  The amount exchanged for vouchers is deducted from the employee’s wages and no tax and National Insurance is taken. Parents then pay their childcare provider with the vouchers. Taking childcare vouchers, means that parents can save up to £933* per year in tax and National Insurance savings.
  • Childcare vouchers can be used to pay for any registered childcare provider for children up to the age of 16.

For more information about how you can start saving using Childcare Vouchers visit www.busybeesbenefits.com.


Notes:
·         *Basic Rate tax payers, subject to individual circumstances.
·   

Saturday, 23 March 2013

New Tax-free Scheme Explained



Childcare costs are on the rise with average nursery fees costing £632 per month.  The government has announced a new childcare funding system which can help to reduce these costs.  The new scheme, available from Autumn 2015, will mean funding is offered to households where both parents work and to single parents who work.  The funding will be allocated per child.

The new scheme will eventually replace the current Childcare voucher scheme.  Parents can continue to benefit from the savings provided by Childcare Vouchers for a period of five years after the new scheme has been implemented. 

The new funding arrangements will be open to more parents; those employed, self-employed and parents on low incomes or minimum wage will be eligible to use the funding. 

How will the new scheme work?
·         The government will be subsidising 20% towards a child’s registered childcare costs.  The remaining 80% will be paid by parents.  So, in effect, for every £100 paid for childcare parents pay £80 and the government pay £20. 

·         Parents will be able to save up to £1,200 per child, per year (the 20% subsidised funding is capped on childcare costing up to £6,000 per child, per year).

·         Parents do not have to rely on employers to offer the scheme; they will be able to choose a voucher provider to manage the funds received from the government, selecting the one which best suits their family needs.

·         Voucher providers collate the funds from the government to pay registered childcare providers directly.

Take advantage of savings available now
As Childcare Vouchers will still be in existence for some time to come, parents should join their employers Childcare Voucher scheme to save up to £933 per year on the cost of childcare (over £1,800 if both parents join a scheme.)

If your employer does not run a scheme; contact us with your employer’s details and we will contact them to set up a scheme – click here to contact us.

What do the changes mean for employers?
The new scheme will not be offered by employers.  However, to help employees maintain their rights to the maximum support available through Childcare Vouchers, employers should continue to offer Childcare Vouchers to its employees.  As an organisation you will also be able to save over £400* per employee, per year as Childcare Vouchers do not attract Employers National Insurance contributions.

If you are an employer and do not currently run a scheme, contact us to set and help your employees to save money on their childcare costs.

For more information visit www.busybeesbenefits.com.

*Subject to individual circumstances.
The table below shows different types of family and the savings they will make using the Tax-free Childcare Scheme vs the Childcare Voucher scheme. Where numbers appear in red, the family will be better off continuing to receive childcare vouchers. These savings assume both parents claim childcare vouchers and all children are under 5. The effect on Additional Rate Tax payers has been excluded but these parents will always be better under the existing scheme. For families with children using childcare above and over 5 a more detailed analysis will be required as savings will depend on costs.

Maximum Savings from Childcare Vouchers
Maximum Savings from Tax-free Childcare Scheme
Difference
Basic Rate
Higher Rate
Basic Rate
Higher Rate
Basic Rate
Higher Rate
2 Working Parents
1 Child in childcare
1866
1249
1200
1200
-666.00
-49.00
2 Working Parents
2 Children  in childcare
1866
1248
2400
2400
+534.00
+1152.00
Single Parent
1 Child in childcare
933
624
1200
1200
+267.00
+576.00
Single Parent
2 Children in Childcare
933
624
2400
2400
+1467.00
+1776.00
2 Parents only one working
1 Child in childcare
933
624
0
0
-933.00
-624.00
2 Parents only one working
2 Children in childcare
933
624
0
0
-933.00
-624.00

Friday, 22 March 2013

New Childcare Support Funds 1 Day In Every 5




Childcare costs are on the rise with average nursery fees costing £632 per month*.  The government has announced a new childcare funding system which can help to reduce these costs.  The new scheme, available from Autumn 2015, will mean funding is offered to households where both parents work and to single parents who work.  The funding will be allocated per child.

The new scheme will eventually replace the current Childcare Voucher scheme.  Parents can continue to benefit from the current Childcare Voucher scheme for a period of five years and will be able to choose the scheme which best suits their family’s needs.

The new funding arrangements aim to improve childcare affordability for working families and will be open to more parents; those employed, self-employed and parents on low incomes or minimum wage will be eligible to use the funding.  The government will be subsidising 20% towards a child’s registered childcare costs; the remaining 80% will be paid by parents.  This will ultimately give parents using full-time childcare, 1 free day each week.

Under the new scheme, for every £80 a parent pays towards childcare, the government will give a £20 payment.  There will be an annual limit to government contributions of 20% on childcare costing up to £6,000 per child - essentially saving parents up to £1,200 per child, per year.

It will be operated by current Childcare Voucher providers who will pay childcare providers directly.  Access to the new scheme will be easier for parents as they will be able to choose the provider they want to use and not rely on employers offering a scheme as the Childcare Voucher scheme presently does.  

The existing Childcare Voucher scheme is a popular and valuable employee benefit allowing working parents to exchange part of their salary, up to £243 per month, in return for the same amount of Childcare Vouchers.  These are then used to pay for the services of registered childcare providers.  Using Childcare Vouchers to pay for childcare can save working parents up to £933 per year.  Both parents are entitled to join a scheme, potentially saving a family over £1,800 per year on the cost of their childcare.

What do the changes mean for parents?
The new system is going to be available to all working parents and will be a valuable money-saving solution for working parents as it will make paying childcare providers easier.

What do you have to do now?
The new scheme will not be implemented until Autumn 2015.  Those parents already on a Childcare Voucher scheme can choose to stay with their current provider or choose a provider offering the best customer service, additional benefits and ultimately the most savings when the new system is implemented.  The Childcare Voucher scheme will continue for the next seven and a half years, giving parents the opportunity to choose whichever scheme provides the most savings for their family.  Parents should ask their employer to join a Childcare Voucher scheme to take advantage of the savings available before the new scheme is introduced.

John Woodward, Busy Bees MD said “We welcome the government’s proposal to increase the amount of financial support for working parents to help them pay for quality childcare.  As the UK’s largest childcare provider and operator of the existing Childcare Voucher scheme, we understand the financial pressure parents face when paying for childcare, particularly for early years care.  We have been campaigning to make childcare more affordable for working parents over the last 12 months.  However, whilst the current Childcare Voucher scheme is an effective way of supporting working parents, it is clear that rising childcare costs and the increased demand for childcare to allow parents to return to work make the funding changes necessary, especially as it will be available to all workers, embracing the self-employed and those receiving low wages.”




Changes to Childcare Funding: What It Means For Employers



Childcare Voucher schemes are set to change after the government announced proposals to help more working parents meet the cost of childcare.

The new Tax-free funding scheme, announced on 19th March, will replace the current salary sacrifice scheme that is used by around 500,000 working parents. It will be based on a subsidised funding model; for every £80 a parent pays towards childcare, the government will pay £20 towards their childcare fees.  There will be an annual limit to this scheme, the government will pay 20% of childcare costing up to £6,000 per child, per year - giving parents a contribution of up to £1,200 per child, per year from the government.


Under the new funding scheme, parents will be able to choose their own voucher provider as it will not be a salary sacrifice scheme operated through their employer. This will remove the administrative work that surrounds the current childcare voucher scheme, as employers will no longer need to make the deductions from their employees’ salaries.

John Woodward, Managing Director of Busy Bees, said: “We are pleased that the government is continuing to support working parents and recognise that the cost of childcare is a huge burden to parents. The new system will not only save recipients more money compared to childcare vouchers but it is also estimated will benefit around twice as many working parents.

Busy Bees Benefits is delighted to embrace the new scheme and is well placed to offer it directly to parents due to our ability to adapt to the new market, our innovative online systems and our existing relationships with clients - not only those who already use childcare vouchers, but those 19,000 parents whose children attend one of the 213 Busy Bees nurseries every week.”

Offering a childcare voucher scheme has been an attractive option for employers because it is a cost-neutral benefit that can save them money by reducing their employer National Insurance contributions. This will no longer be the case under the new scheme. However, the less tangible benefit of keeping skilled parents on the workforce, and attracting those parents who want to work, will surely be welcomed.

Although businesses will no longer be a part of the chain in supporting parents with childcare costs, it is still in their interest to communicate with employees about the potential savings available to them and the introduction of the new funding scheme.

Childcare vouchers, first introduced in 1998, have been an important factor in supporting parents who work. According to research in November last year by Busy Bees Benefits, 1 in 3 parents said that the provision of childcare vouchers influenced their return to employment.

Until the new Tax-free childcare scheme is launched Autumn 2015, employers should continue to offer their staff childcare vouchers. Those organisations which do not currently have a scheme in place are still able to set one up and enable their company and staff to take advantage of savings available as well as giving parents the option when available to the most tax efficient method of paying their childcare fees.

Thursday, 21 March 2013

New Funding Scheme Will Make Billing Simpler for Childcare Providers




The government has announced changes to financial support for working parents who use registered childcare. The new scheme, available from Autumn 2015, will mean funding is offered to households where both parents work and to single parents who work. It will be allocated per child. The funding will eventually replace the current childcare voucher scheme, which will continue to be open to new joiners for a period of 5 years. During that time parents will have the option to choose the scheme which best suits them.

The new Tax-free childcare scheme will be based on a subsidised model and will be offered via Childcare Voucher companies such as Busy Bees Benefits which already operate the current childcare voucher scheme. Under the new scheme it will be up to individual parents to choose their voucher provider. Given this change, childcare providers will no doubt find themselves playing a greater role in advising parents about the financial support available to make their childcare more affordable.

The new scheme will not only increase the financial support for many parents and thus increase occupancy, it will simplify the payments system to childcare providers, with the government funding (20% of the bill up to a maximum of £6,000 per year) providing savings of up to £1,200 per child.

JohnWoodward, MD of Busy Bees Benefits said:

BusyBees Benefits welcomes the principle of this proposal as it will be simpler for parents and childcare providers to understand and access. As a childcare voucher provider with many years’ experience in the sector, Busy Bees Benefits is well placed to offer the new funding scheme. We will make it as easy as possible for parents and carers. We introduced childcare vouchers to 100,000 parents and became the leading provider. We will do the same with the subsidy scheme, ensuring as many parents as possible make use of their entitlement and that they are allocated the correct amount of funding.  We will provide a service for everyone.”

Whilst the childcare voucher scheme is a popular and effective way to support working parents, it is clear that rising childcare costs, the fact that employers are not obliged to offer a scheme, and that those who are self employed or on very low pay cannot benefit from the savings, means that change is now necessary. One of the shortcomings of the current childcare voucher system is the fact that it is not index-linked which means that the savings have not changed since 2006.

Busy Bees Benefits recognised the increased squeeze on ordinary working families and has been campaigning for the last year for the maximum amount of pay which a parent can sacrifice from their salary to be increased, working on behalf of parents who have struggled to meet 2012/13 costs with 2006 allowances.

It is estimated that 2.5 million parents will benefit under the new scheme, more than twice as many when compared to childcare vouchers.

A consultation period will follow the announcement and it is expected the new scheme will start in Autumn 2015.

Tuesday, 19 March 2013

New Funding To Make Childcare More Affordable Welcomed By Busy Bees



The long-awaited announcement by government of new arrangements to help working parents pay for childcare is great news.  Busy Bees welcomes the principle of this proposal as it will help to make childcare more affordable for working parents and will be a simple system.  Government has recognised the financial struggle that parents face and is helping to support them.

The scheme will eventually replace Childcare Vouchers, available since 1998. Whilst Childcare Vouchers save parents up to £933 a year, they rely on employers to provide a scheme as an employee benefit, leading to the support for parents being very patchy. They are also not available to those who are self-employed or those on minimum wage (as the law does not allow amounts to be sacrificed which would take their pay level below the minimum wage threshold). The new scheme will offer help to households where both parents work and single working parents.  It is estimated the new scheme will benefit around 2.5 million working parents which in turn will help employers wanting to recruit and retain skilled staff.

Under the new scheme, the government will subsidise 20% of childcare fees up to £6,000 per year for each child. So, in effect, for every £100 paid for childcare the parents pay £80 and the government adds £20.  Parents will therefore be able to get government contributions of up to £1,200 per child, per year. Initially it will be available for children up to the age of 5 and will eventually include children up to the age of 12.

John Woodward, MD of Busy Bees group said:

“We welcome the government’s proposals to provide financial support to working parents to help them pay for quality childcare. As the UK’s largest childcare provider and operator of the existing Childcare Voucher scheme, Busy Bees understands the financial pressure parents face when paying for childcare, particularly for early years care.

Whilst the Childcare Voucher scheme is a popular and effective way to support working parents, it is clear that rising costs and the increased demand for childcare to allow parents to return to work means that change is necessary. Busy Bees recognised the squeeze on ordinary working families and has been campaigning for the last year for the savings to be increased, working on behalf of parents who have struggled to meet 2012/13 costs with 2006 allowances. Busy Bees is well placed to offer the new voucher and will make the scheme as easy as possible for parents and childcare providers.”

The Childcare Voucher scheme guarantees that the funds are spent on registered childcare, avoiding fraudulent activity and providing peace of mind for parents.  This new funding scheme will continue to guarantee this and will continue to provide the safeguards parents enjoyed when using Childcare Vouchers.

Until the new scheme is in place, Childcare Vouchers will continue to be available and parents are urged to approach their employer asking them to offer a scheme if they do not already have one as the savings for parents and employers are significant.  Even when the new scheme is in place, there will be a period of 5 years when parents can still join the Childcare Voucher scheme if this is to their advantage.

The new scheme is expected to launch in Autumn 2015 and Busy Bees will be contributing to the consultation in the period which follows the announcement.  

Tuesday, 12 March 2013

Save Money on a Fun Easter



Easter is almost here, bringing thoughts of spring and warmer days ahead, but parents can find entertaining their children for two weeks during the Easter holiday a costly experience.  Not all parents can take time off work while the schools are closed and find the need to use childcare, activity clubs or other out of school groups.

The first of the longer school holidays in the year is a perfect time for kids to try new activities, meet new people and develop new skills. Parents may think they can’t give their children these opportunities because they are too expensive. However, working parents can use childcare vouchers to help pay for such activities.  Most parents use childcare vouchers to help fund registered childcare for pre-school children. Vouchers are accepted by nurseries, nannies, au pairs or childminders. It is less well known that childcare vouchers can be used for school-age children to pay for out of school clubs and activity camps.

JohnWoodward, MD of Busy Bees Benefits said “As long as parents check before they book that the activity organiser accepts childcare vouchers as payment, they can give their child the opportunity to enjoy a host of fun and educational days and know they are being cared for by a registered activity provider. Even if you don’t need childcare during term-time, vouchers can be saved up during the year to help pay for holiday childcare and activity costs.”

How can parents access childcare vouchers and how do they work?
  • Childcare vouchers are available to working parents via their employer. Childcare vouchers are a benefit, not a right, and so parents must ask their employer to provide them. The employer will save money too.
  • Once the employer agrees to provide childcare vouchers, the parent simply registers to the scheme, stating how much they would like to deduct from their wages each pay day in return for the vouchers.
  • Parents can currently exchange up to £243* per month.
  • The amount exchanged for vouchers is deducted from the employee’s wages and no tax and National Insurance is taken. Parents then pay their childcare provider with the vouchers. Through taking childcare vouchers, parents can save up to £933* per year.
  • Childcare vouchers can be used to pay any registered childcare provider for children up to the age of 16.

For more information about how you can start saving using Childcare Vouchers visit www.busybeesbenefits.com.


·         *Basic Rate tax payers, subject to individual circumstances.

Wednesday, 6 March 2013

Childcare Costs Rise - Are You Taking Advantage Of Savings Available?




Childcare costs are rising significantly above the rate of inflation in England.  According to the latest research childcare costs have significantly increased, with nursery fees costing 77% more in 2013 than they did 10 years ago, even though average earnings remain at a similar level to those in 2003.

The latest survey by the Daycare Trust has found that average nursery costs have risen by 4.2% for children under the age of 2 and 6.6% for over 2’s in the last 12 months.  The research also found that child minder costs have increased by up to 5.9%.  However, the largest escalation in costs is those for older children, with after-school care costing £49.67 per week, a rise of 9%.

John Woodward, CEO of Busy Bees Benefits said “finding high-quality, affordable childcare is essential for many working parents.  Although costs have continued to rise, parents should ensure they are taking advantage of the childcare savings available to them.”

Securing affordable childcare remains a barrier for most parents wanting to return to, or continue to work.  There are several childcare funding options for parents to help reduce their childcare costs. 

Childcare Vouchers are a government initiated scheme available for working parents to save money on their childcare costs.  Available from employers, parents can exchange part of their salary, up to £243** per month, in return for Childcare Vouchers which are then used to pay their childcare provider.  Childcare Vouchers can save working parents up to £933** per year, doubling to more than £1,800** if both parents join a scheme.

Childcare Vouchers are used by more than 500,000 working parents and can be essential for employers for retaining and attracting staff.  In a recent customer survey by Busy Bees Benefits, a leading Childcare Voucher provider, 1 in 3 parents believe that the provision of Childcare Vouchers influenced their decision to return to work or remain with their current employer after having a family.

The provision of Childcare Vouchers does not only help parents to return to work when their children are very young using nurseries, nannies, au pair’s and child minder’s.  Vouchers can be used to pay for the care of older children to be used for before and after school care, allowing working parents to maintain their working hours when children are of schooling age.

All three and four year old children are entitled to 15 hours of free Early Years Entitlement per week for 38 weeks of the year.  Parents can use nurseries, pre-schools, child minders and school or nursery classes in independent schools.  Access to this free entitlement not only enables parents to save money, it also gives them a choice of where to take their free entitlement, allowing them to access childcare they require to help their children learn and develop.

Support for working parents on low incomes is also available.  Low income parents can receive help towards their childcare costs if they work more than 16 hours per week through the childcare element of working tax credits.  This offers up to 70% towards the costs of childcare, up to a maximum of £122.50 per week1.

Busy Bees Benefits is part of the Busy Bees Group, the largest childcare provider in the UK, operating over 200 nurseries nationwide.  With over 30 years’ experience in providing quality childcare, they understand the importance of parents being able to access affordable childcare.  Busy Bees Benefits is currently lobbying the government to provide more help for working parents with their childcare costs by campaigning to raise the weekly allowance from £55 to £75.  Raising the cap will make a real difference to working parents, increasing savings to over £1200 per parent, per year**. Busy Bees Benefits has an online petition at the heart of the campaign which can be found at http://epetitions.direct.gov.uk/petitions/31669.

John Woodward said “In our opinion the Childcare Voucher system is the most effective way of helping working parents save money, which is why we introduced it in the first place.

However, raising the cap on childcare vouchers would be a considerable financial benefit for our working families.”

Childcare costs will continue rise due to increases in childcare providers’ overheads and legislation changes.  Parents should be aware that these costs need not be a large financial burden on their family as there are money-saving solutions available to make their childcare costs more affordable.

Ends
Notes
** subject to individual circumstances
1 – For one child, £210 for 2 or more children.  Subject to individual circumstances.