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Childcare Voucher Scheme Extended for New Joiners

View profile for James Champness
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The Government has announced that the childcare voucher scheme (under which employees can elect to have the value of childcare vouchers deducted at source by way of salary sacrifice) has been given a six-month extension for new joiners.  The original plan was that new members would be barred from joining the scheme after 6 April 2018, in favour of the Government’s new “Tax-Free Childcare” programme, introduced in 2017.  The two schemes will therefore continue to operate in parallel until October 2018.  After this time, existing members will be able to remain within the childcare voucher scheme, but the scheme will be closed to new members.  

This offers an extended opportunity for employers to sign up to offer Childcare Vouchers to their employees; this is an attractive “perk” to be able to offer, and also has a commercial benefit to the employer as a result of reduced Employer’s National Insurance Contributions on the amount of salary sacrificed.  Once the scheme closes, employers will still need to administer the scheme for new members, but will not be able to accept any new members into the scheme.

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