The Government is planning to introduce a new Tax-Free Childcare scheme from Autumn 2015. The new scheme will allow parents to save up to 20% of their childcare costs, with annual savings of up to £2,000 per child. Tax-Free Childcare will initially only be available to the under 5’s, but it should be extended to the under 12’s within its first year. Here is further information.
Do I need to wait until 2015?
For parents who already have childcare costs, there’s no need to wait until 2015! KiddiVouchers Childcare Voucher scheme enables you to enjoy tax and National Insurance savings on childcare right now as part of your employee benefits package.
To start enjoying tax relief on your childcare costs, simply contact KiddiVouchers on0800 612 9015 or visit www.kiddivouchers.com, quoting our scheme reference number S647466D.
How is Tax-Free Childcare different from Childcare Vouchers?
Childcare Vouchers provide parents with both tax and National Insurance savings, so basic-rate taxpayers typically save 32% and higher-rate taxpayers typically save 42%. These savings are available on childcare costs of up to £243 a month for each basic-rate taxpayer or £124 a month for each higher-rate taxpayer.
Tax-Free Childcare will only provide savings at a rate of 20%, but these savings will be available on childcare costs of up to £833 a month (or £10,000 a year) per child.
In general, parents with very high childcare costs will be better off under the new scheme, while parents with more modest costs are better off with Childcare Vouchers. To find out which scheme is best for you, click here.
Some groups of parents will be ineligible for Tax-Free Childcare, including those with a stay-at-home partner, additional-rate taxpayers and parents who receive any support through tax credits.
Can I receive Childcare Vouchers beyond 2015?
Yes, as long as you sign up with KiddiVouchers before August 2015, you’ll be able to continue to order childcare vouchers even after the new Tax-Free Childcare scheme is up and running. You’ll also be able to continue to spend any childcare vouchers which you have saved in your KiddiVouchers account.
If you decide that Tax-Free Childcare will be better for your family, you will be able to switch to the new scheme. However, many parents are expected to be better off with Childcare Vouchers, so it’s worth securing your place in the scheme now.
What action should I take?
To find out more about Childcare Vouchers, or to sign up with KiddiVouchers, firstname.lastname@example.org, or call 0800 612 9015, or visitwww.kiddivouchers.com, quoting our scheme reference number S647466D.