Despite the fact that Childcare Vouchers have been around for a number of years, some myths and misunderstandings still exist about this employee benefit. Families often think they are for mums who return to work, but Childcare Vouchers are available for dads too and in many families dads are still the only working parent.
Better than a pair of socks or a box of chocs, employers can give the gift of big savings to working parents, saving them up to £933 a year on the cost of registered childcare, says Busy Bees Benefits. What father wouldn’t want that? Father’s Day, on 16th June, is a great time to send a message to working dads that they are valued in the workplace by helping to make their childcare costs more affordable.
Childcare Vouchers are basically a tax break to help parents pay for childcare. Parents give up part of their salary each week or month and do not have to pay tax or National Insurance on that portion of their wages, which are used to pay directly for a wide range of registered childcare. This can save a working parent up to £933* a year if they are a basic rate taxpayer. If both parents work and join a scheme, these savings can be doubled. For every employee who takes Childcare Vouchers, the employer will save money in Employer National Insurance contributions, up to £402** a year.
It’s also worth knowing that the Childcare Voucher scheme may only be open until Autumn 2015, when the Government is expected to launch the Tax-free Childcare scheme***. Savings for some families will be smaller under the new scheme and there will be no direct savings for employers. Only families where both parents work will benefit from the new scheme, so it is even more important to ensure that dads know about Childcare Vouchers. Offering a Childcare Voucher scheme now will bring employee and employer savings for the next two and a half years, at which point the Childcare Voucher scheme is expected to close to new entrants. Parents already receiving Childcare Vouchers should then be able choose which scheme is best for them. It is expected that after that, Childcare Vouchers will be available to existing users for 5 years, which means a further 5 years of savings (over £2000** per scheme member) for businesses too.
For more information about how you can start saving using Childcare Vouchers visit www.busybeesbenefits.com.
*Subject to individual circumstances.
· **Maximum savings before service charge is applied.
· ***Details are subject to Government consultation