16 Mar Tax-Free Childcare – A reprieve for vouchers
A reprieve for employer-backed childcare voucher scheme
BBC News has reported that Education Secretary Damian Hinds made the concession during a Commons debate.
The employer-backed voucher scheme, used by up to 450,000 parents, was due to be closed to new entrants next month but will now have a temporary reprieve.
An alternative system of tax-free childcare introduced by the government has suffered a succession of problems.
Ministers announced in 2013 that the employee scheme – in which staff in participating companies can receive childcare vouchers worth up to £55 a week in lieu of their salary – would effectively be replaced by a system in which parents have to open an online voucher account and have their payments topped up by the state.
But the new system, which provides support of up to £2,000 a year, has been beset with problems. Because of glitches on the HMRC website, thousands have been unable to either set up tax-free accounts or access the money they had paid into them.
If you want to find out what you are entitled to check out the Childcare calculator here [https://www.gov.uk/childcare-calculator] or check out the childcare choices website www.childcarechoices.gov.uk
“I have heard the concerns that have been raised about this and the timing, and I can confirm that we will be able to keep the voucher scheme open for a further six months to new entrants.”
Speaking in Parliament, Mr Hinds said:
Those unable to access the tax-free childcare payments have been paid a total of £966,666. Nearly £40,000 in compensation has been paid to parents for inconvenience and expenses incurred.
Read our blog here about the new system here.
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