Tax Free Childcare Scheme Announced

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Written by Tim Barnes-Clay

The Queen has announced new laws regarding childcare support in the country, proposing to make it tax-free from Autumn 2015. Replacing the current Childcare Voucher System, the changes would mean families are entitled to 20% of their annual childcare costs.

Whilst this will come as welcome news for many families, it has still been at the focus of much scrutiny. Ian McMath, CEO of Sodexo Benefits and Rewards Services, criticised the length it will take before the changes occur: ‘The long wait shows that the government is either unwilling or unable to improve the situation in the short term’.

Other issues have included the fact that the program will have to be started from the ground, meaning it will be ‘kept out of the hands of the current voucher providers who have the experience and the infrastructure already in place’.

Under the current childcare system, a family of four can save up to £1,886 a year. However, because these changes won’t be implemented until next year, parents can still remain on the Childcare Voucher System up to and beyond the launch of the new scheme. This means new parents can still apply for the current system but will not be able to after the changes have been put into effect.

‘Our advice would be to join this scheme [Childcare Voucher System] whilst it is available and start saving on money now’, McMath said.

Parents who are also currently using this scheme will have to choose next year whether they want to continue on the current system or convert to Tax-Free Childcare.