Government Announces Reprieve for Childcare Vouchers

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The Government had originally stated that the Tax-Free Childcare scheme would be launched in the autumn of 2015. However, HMRC have confirmed that the Government’s plans to launch this scheme have now been postponed until early 2017.

What does this mean?

Working parents with children up to 16 years of age and their employers will still have the opportunity to take advantage of the current Childcare Voucher Scheme which allows working parents to pay for childcare prior to having tax and National Insurance contributions deducted from their salary. For many parents, this scheme can save them around £1,000 a year on childcare and the employer benefits as well by saving up to £402 in National Insurance contributions.

When the new scheme is launched, it will no longer be possible to register for childcare vouchers but parents who have already registered will have the choice of staying with the existing scheme or switching to the new Tax-Free Childcare scheme.

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