Employers will still be involved in childcare voucher provision

The government has published a consultation on its new tax-free childcare scheme, which will be introduced in autumn 2015. The new plan will not replace current employer-funded childcare voucher schemes.

Julian Foster, spokesperson at the Childcare Voucher Providers Association (CVPA) and managing director of Computershare Voucher Services, said: “For any employer with an existing childcare voucher scheme, it won’t be taken away when the new scheme is introduced.

“Anybody in the existing scheme can continue on the same terms, but the way the new scheme will work is that employees will be able to have a direct contract with the voucher provider, so there isn’t a direct role for employers.”

However, the government has said it sees the advantages of employer involvement and is interested in exploring how any future role might work.

The CVPA’s Making childcare work: what role do employers want to play in supporting working parents? research, published in August, found that more than 60% of employer respondents that currently offer childcare vouchers want to continue doing so when the new scheme comes in. Foster added: “We are waiting for clarification from the government as to how employers can get involved.

“There is an education piece to do as part of the consultation process for the government. At this stage, besides planned engagement with employer representative groups, I don’t think there are that many employers that are going to be directly involved in the consultation.”

As part of the consultation, the government has confirmed that in the scheme’s first year, children born in or after September 2010 will be eligible (those aged under five and younger five-year-olds). This will widen to include six-year-olds in the second year, and so on until all children under 12 are eligible. Once the scheme has been fully phased in, eligibility will end in the September following a child’s 11th birthday.

The current employer-funded childcare vouchers can be used for older children, up to 1 September following a child’s 15th birthday or a 16th birthday if the child is disabled.

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Suzanne Tyrell, associate at Taylor Wessing, said: “Employers will have to continue to run their existing scheme until the last scheme member leaves, and that will happen when the employees’ children grow too old to claim.”

New tax-free childcare scheme

  • The new scheme will cover 20%, equivalent to the basic rate of tax, of working families’ childcare costs up to a limit of £6,000 a year per child.
  • In the first year of the scheme, starting in autumn 2015, children born in or after September 2010 will be eligible (those aged under five and younger five-year-olds). This will widen to include to six-year-olds in the second year, and so on until all children under 12 are eligible.
  • The scheme will be run through online voucher accounts.