Posted by Will Hanbury on April 5, 2018
The Childcare voucher scheme was going to be closing to new entrants from early April 2018 – however following a House of Commons debate last month, the scheme has now been extended for around a further 6 months for new members.
The scheme offers savings per parent per year. Each parent can take up to £55 each week from their salary before Tax and National Insurance, or £243 a month to spend on childcare no matter how many children they have, as long as the parent is a basic-rate taxpayer. This saves parents around £930 a year. You do not have to do anything if you are already in this scheme, you are protected when the scheme closes.
Another scheme which the Government introduced last year is Tax-Free Childcare which is to replace the Childcare voucher scheme. This offers savings per child per year and is more like a savings scheme. Parents have 20% of their childcare costs each year met by the Government, up to a limit of £2,000 a year per child or £4,000 if your child is disabled. Both parents (if they are together) must be working 16 hours a week and paid at least the national living wage. This scheme is not available to anyone claiming tax credits or universal credits.
Both schemes reduce the cost of childcare but one may suit your circumstances better, and you will need to do your own research to find out which scheme is better for your needs before you apply.