Personal : Changes to Childcare Vouchers From April

Changes to Childcare Vouchers From April

A guest blog from Jonathan Berger, Employment Tax & Employee Benefits Consultant, People and Organisation at PwC.

Companies need to take action now to ensure they can enrol new participants in their childcare voucher scheme prior to the 6 April 2018 deadline, and ensure any existing members who wish to stay in the scheme can continue.

HMRC have now provided additional clarification regarding the required conditions for continued exemption within a childcare voucher scheme for existing participants beyond 6 April 2018.

The transitional requirement goes beyond merely an employee registering for childcare vouchers at 6 April and also requires them to have received a childcare voucher prior to the 6 April from their current employer (within the previous 52 weeks) in order to ensure eligibility.

A confirmed entitlement to a childcare voucher would be expected to include the ability for the employee to draw on the voucher (even if electronically).

If you have employees who are either joining the business during February, March and early April as well as those who become eligible to join the scheme during this time (for instance those on parental leave), it is worth giving some thought to how you might be able to accommodate their participation and the practical considerations that need to be taken into account in relation to payroll and your benefit provider.

If you're a participant in a childcare voucher scheme, remember that whilst many voucher providers provide electronic vouchers that don't expire, but not all do so it's worth checking.

Whilst the new Tax-Free Childcare scheme doesn't require any employer involvement, some employees will be better off staying in the Childcare Voucher scheme.

Once you jump ship to TFC, you won't be able to re-join after 6 April 2018 so plan your move carefully.

If this is something you would like to discuss in more detail, please let me know, the practicalities may be more complex than expected and if your employees miss the deadlines, they won't be able to participate in the arrangement going forwards.

Shared with permission - This article was originally posted by Jonathan Berger, Employment Tax, Employee Benefits & Reward Consultant, People and Organisation at PwC on LinkedIn.