There is less than a year left for parents to register for childcare vouchers before a new government initiative fully replaces the current scheme.
From April 2018 parents will no longer be able to register to receive childcare vouchers as the system is fully replaced by the Tax-Free Childcare scheme.
Under the current voucher system parents are able to buy up to £55 a week in vouchers if they are basic rate taxpayers, £28 for higher rate taxpayers and £25 each week for those paying the additional rate.
This is done on a ‘salary sacrifice’ basis, meaning the cost of the vouchers is paid for before tax is deducted.
While this scheme is being closed to new applications from next year, those registering before the deadline will be able to take part in the voucher scheme until their child reaches 15.
The Tax-Free Childcare scheme is designed to be open to more people, such as the self-employed, but some parents who are able to claim under the current system will no longer be eligible.
This includes parents with an income of more than £100,000, families where one parent does not work or those with low childcare costs. These groups are all likely to be better off under the current scheme.
Online tools such as the Computershare calculator and the government childcare calculator can help you decide which scheme is right for you. Those who would be better off under the current system then have until next year’s deadline to register.
Julian Foster, managing director at Computershare Voucher Services, says: “Childcare vouchers have provided millions of households with the support they need to enjoy healthy, balanced and secure family lives.
“Every parent will need to consider whether Tax-Free Childcare will represent a better option for their family, but if they want the option of collecting childcare vouchers beyond April 2018, they must register for vouchers before that date.
“On top of this, employers need to spend time over the next year reminding their staff that the clock is ticking: where parents think that their families will benefit from childcare vouchers, the sooner they register, the better.”