Tax-Free Childcare is the new scheme proposed by the Government to replace childcare vouchers this Autumn (childcareplus & kidsclubplus).
Are you aware that LB Waltham Forest operates the childcareplus & kidsclubplus scheme to help working parents with the cost of childcare? If Tax-Free Childcare goes ahead this scheme will be closed to new entrants after the new scheme is formally adopted by the government.
If you are not currently using childcareplus & kidsclubplus now is the time to start!
As an existing member of the childcareplus/ kidscubplus scheme, in Autumn 2015 you will be given the choice of which scheme will be best suited to you. More importantly joining now means you can stock up on childcareplus & kidsclubplus e-vouchers for school holidays or whenever you need them before the current scheme ceases and the new government scheme kicks in.
If you already use childcareplus & kidsclubplus you can relax in the knowledge that you can remain in the current scheme and will have the option to choose which scheme will save you the most money in Autumn 2015. Many parents will save significantly more on the current scheme than they would with the new Tax-Free Childcare scheme.
What you should know:
- The new Tax-Free Childcare could leave you worse off
- Tax-Free Childcare provides a 20p per pound cash back on childcare costs, so for example, if you and your partner are both basic rate taxpayers with one child, you would have to be spending at least £9,330 on childcare per year to receive the same amount of support as the current scheme offers.
- Unlike the current scheme where both parents can apply complications will arise if parents are separated – under the new rules, only one parent can claim. The Government states that they will decide who gets the money in cases where parents cannot agree.
- You can only claim Tax-Free Childcare for children under 12 whereas the current scheme is available for childcare up to the age of 15.
- Members of the childcareplus & kidsclubplus scheme receive exclusive discounted rates at a variety of activity camps such as the well known Barracudas.
- Are you eligible for Tax-Free Childcare?
- If you receive Child Tax Credits, you will have to opt out of this benefit in order to be eligible for Tax-Free Childcare. For many, this would result in a loss of £545 a year on top of the childcare voucher savings currently made.
- Both you and your partner must be working to claim Tax-Free Childcare. On the existing childcareplus scheme only one of you has to be working.
- There will be more administration for parents using Tax-Free Childcare
- You will need to confirm your eligibility for Tax-Free Childcare every quarter and manage payments in and out of your online account each month (before the government’s 20% is added).
- Your employer will no longer have any involvement in managing the vouchers on your behalf and this responsibility will fall completely on your shoulders.
If you think the new Tax-Free Childcare scheme will leave your family worse off, then you can continue using childcareplus. You can still receive vouchers after this Autumn’s changeover, unless you change employers. Even if you move employer once the new scheme is in place, your childcare vouchers will not expire.
Don’t know which scheme will be best for you?
|childcareplus & kidsclubplus Vouchers||Tax-Free Childcare|
|Save up to £933 per parent (£1,866 per family)||Save 20% of childcare costs|
|For every £100 spent on childcare you could save £32 / 32%*||For every £100 spent on childcare you could save £20 / 20%|
|Available for children up to the age of 15***||Available for children up to the age of 12|
|Both parents can claim despite relationship status||Only one parent can claim if divorced or separated|
|It doesn’t matter if only one parent is working||Both parents must be working|
|Employer manages scheme on parents behalf||Parent must manage everything themselves|
What are you waiting for? Start saving up to £933 per year now with childcareplus & kidsclubplus vouchers.
Want to find out more?
Call: 0800 161 3042 from a landline or 01908 303 502 from a mobile**
Text: childcare to 81025**
* savings based on a basic rate taxpaying employee.
** calls and text messages are charged at your standard network rate.
*** until the age of 16 if your child is registered disabled.