Following a ruling by the Supreme Court on 1 July 2015, the government has announced the decision to delay the launch of the new tax-free childcare scheme until 2017.
This followed a challenge to the government’s plans by childcare voucher providers, which had sought to contest the decision to deliver the new scheme in partnership with National Savings & Investments.
The government had originally been intending to introduce the new scheme from this autumn.
How will this affect employers and employees?
There will now be no requirement for employers to make changes to their existing employer-supported childcare benefit offered through salary sacrifice until 2017.
There is also no requirement for parents to switch to tax-free childcare if they do not wish to. The existing scheme (employer-supported childcare) will continue to run. It will not be possible to register for employer-supported childcare after the new scheme is introduced, but those already registered by this point will be able to use it for as long as their employer continues to offer it.
The good news is that the delay now gives parents more time to understand the proposed changes the new scheme will bring and determine which option will be most economical for them.
Once launched, the government has stated that the tax-free childcare scheme will provide up to £2,000 a year of tax-free childcare support per child (or £4,000 a year for a disabled child) to up to 1.8 million households.
Following the announcement about the delay in introducing tax-free childcare, the government has posted 10 things parents should know about the new scheme.
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If you would like to discuss how this could affect your organisation, please contact us on 0800 066 5433.