Employer-supported childcare vouchers to go

In the Budget today, Chancellor George Osbourne has confirmed it will raise the costs cap on its tax-free childcare scheme to £2,000 as announced on 18 March.

The childcare voucher scheme will continue to stay open, as long as an employee does not change employers, but it will be closed to new entrants from autumn 2015. Workplace nurseries will be unaffected.


The tax-free childcare scheme, which will take effect from autumn 2015, will be rolled out to all eligible families with children under 12 within the first year of its operation.

This is also significantly faster than previously proposed, where children under 12 would have gradually qualified for the scheme over a seven-year period.

The government said that tax-free childcare will be open to more than twice as many families as currently use employer-supported childcare vouchers and, unlike these vouchers, will not depend on employers offering it.

The government said it will benefit childcare providers, which will be able to receive each child’s payment from a single account under tax-free childcare, rather than keep track of multiple payments relating to a single child from different bank and voucher accounts.