Working parents now have more time to decide which childcare scheme will make them the most savings. This comes as a delay in the Tax Free Childcare scheme is announced, following Supreme Court action, which has now claimed the scheme is indeed lawful.
The new scheme, which subsidises 20% of a child’s childcare costs, is now expected to launch in early 2017 rather than its original date of autumn this year. This will allow parents more time to sign up to the Childcare Voucher scheme, before the option is unavailable when the new scheme comes into action.
This is welcome news for parents who will be worse off on the Tax Free Childcare scheme. Middle-low earning parents, families with only one working parent, families using childcare for only a few days a week and those who have children in childcare over the age of 12 are all expecting to be hit by the new scheme in 2017. After Tax-free Childcare is introduced, the Childcare Voucher scheme will be closed to new entrants, which means that parents wanting more affordable childcare will only be able to use Tax-free Childcare to make savings.
Research conducted by Childcare Voucher provider, Busy Bees Benefits has found that at least 80% of parents will be better off continuing to use Childcare Vouchers after Tax-free Childcare is launched in 2017. Childcare Vouchers are therefore the answer.
Busy Bees Benefits is offering parents individual assessments of their circumstances to help them decide which scheme will be financially better for their families.
“With Tax Free Childcare, the Government will be subsidising 20% of a child’s childcare, on costs of up to £10,000 per year,” commented John Woodward, CEO of Busy Bees Benefits. “Therefore, to get maximum savings, parents must spend £8,000 per child, each year. To get the maximum savings using Childcare Vouchers, parents are only required to spend £2,916 each year.
“Both parents can use Childcare Vouchers; therefore savings could double to more than £1,800 at an outlay of only £5,832 per family to get maximum savings,” he concluded.
To access Childcare Vouchers, employers need to be offering a scheme and employees need to register before 2017. Childcare Voucher provider, Busy Bees Benefits is recommending that all employees have one deduction each tax year to guarantee access to Childcare Vouchers. Providing employees have one deduction, they will be able to remain on the Childcare Voucher scheme until they no longer require it.
Busy Bees Benefits is advising all employers to continue offering Childcare Vouchers to their employees to ensure they can still maximise savings for the organisation as they will continue to save up to £402 per employee on the scheme.