Childcare voucher deadline extended

Childcare vouchers can save parents with children aged up to 15 years over £1,000 a year on childcare. They’re only available via employers, and many large and small companies take part. They are a good incentive to employees and employers can save money too.

The childcare voucher scheme was scheduled to close on 5 April 2018, but the deadline has been extended. Nicola Roby, Director at CHW Small Business Accountants in Bolton explains further.

The Government’s tax-free childcare scheme was intended to replace childcare vouchers but there have been problems with its rollout. As a result, employers will be able to continue offering childcare vouchers after the Government announced a 6-month extension to the scheme.

Childcare vouchers will now remain open to new applicants until an unspecified date in October 2018.

Employees joining a childcare voucher scheme are able to take up to £55 a week via salary sacrifice to cover childcare costs, free of tax or national insurance. Further, employers save the employer’s NI of up to 12% on the value of the vouchers.

The six month extension was confirmed by education secretary Damian Hinds in a parliamentary debate on 13 March 2018 when he commented “I have heard the concerns about the timing, and I can confirm that we will be able to keep the voucher scheme open to new entrants for a further 6 months.”

A few very generous employers do decide to give the vouchers to employees on top of their normal salary, but most request a ‘salary sacrifice’, which, if your employee is on basic-rate tax, and exchanges £1,000 of salary for vouchers they can be £300 better off.

For more advice on this or any other payroll queries contact Nicola Roby at CHW Small Business Accountants in Bolton on 01204 534031 or via our contact us page.


This article is for general guidance only. It provides an outline, and may not include points which are important to your situation. You should not depend on this blog without taking advice based on the full facts of your case. The information given was correct at the time of publication.

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