The new Tax Free Childcare scheme, launched in 2017 :-
HMRC will add 20% to deposits made
Self-employed to receive assistance for the first time
Research shows 2 in every 3 households will be worse off under the new scheme
Top ups will stop following child’s 11th birthday
No help for additional rate taxpayer
Both parents must be working the minimum hours
For many the Existing Childcare Voucher Scheme will be more beneficial, but they need to act fast as the old scheme will be closed to new entrants from April 2018:-
Both parents can access the vouchers
Can reduce salary sufficiently to reinstate child benefit
Open to all employed taxpayers
Available to company directors
Only one parent needs to be working
Continues until after the child’s 15th birthday
It may not be clear, which is more suitable.
Impact for clients
These changes will affect all clients:-
The self-employed should be made aware of the existence of the new accounts.
Directors should be made aware that the voucher scheme is available for them to use
Employees should be made aware of the existence of both schemes and which is best for them
Additional rate taxpayers should be advised that they can only access the voucher scheme as the new account scheme is not available for them
Those close to the £50k salary level where child benefit is withdrawn. A voucher scheme can reduce salary via salary sacrifice and child benefit could be reinstated adding an extra £1,700 to the household income for a family with 2 children.
Our Impact Review pack will help you
Our Childcare Voucher Impact Review will help you;
Understand the issues and how to use the resource to set up and provide the review,
Promote the issue using a news item, scripted advertising slides and recorded advert video,
Illustrate the potential impact on clients from the changes using our calculator,
Provide opportunity to explore ways with clients on how they could save tax,
And the opportunity to sell your extra services, using our structured approach.