UPDATED: Changes to Childcare Vouchers
A guest blog from Jonathan Berger, Employment Tax & Employee Benefits Consultant
The Childcare Voucher scheme is closing to new joiners from 4 October 2018.
Companies need to take action now to ensure they can enrol new participants in their childcare voucher scheme prior to the 4 October 2018 deadline, and ensure any existing members who wish to stay in the scheme can continue.
HMRC have now provided additional clarification regarding the required conditions for continued exemption within a childcare voucher scheme for existing participants beyond 4 October 2018.
The transitional requirement goes beyond merely an employee registering for childcare vouchers at 4 October and also requires them to have received a childcare voucher prior to the 4 October from their current employer (within the previous 52 weeks) in order to ensure eligibility.
A confirmed entitlement to a childcare voucher would be expected to include the ability for the employee to draw on the voucher (even if electronically).
If you're a participant in a childcare voucher scheme, remember that whilst many voucher providers provide electronic vouchers that don't expire, but not all do so it's worth checking.
Whilst the new Tax-Free Childcare scheme doesn't require any employer involvement, some employees will be better off staying in the Childcare Voucher scheme.
Once you jump ship to TFC, you won't be able to re-join after 4 October 2018 so plan your move carefully.
If this is something you would like to discuss in more detail, please let me know, the practicalities may be more complex than expected and if your employees miss the deadlines, they won’t be able to participate in the arrangement going forwards.
Shared with permission - This article was originally posted by Jonathan Berger, Employment Tax, Employee Benefits & Reward Consultant
We have created an infographic that can be found here that further highlights the changes made to childcare vouchers.