FOR IMMEDIATE RELEASE


CONTACT: Will Nathan
0203 102 3622 / 07947 501 081

Childcare Voucher Providers comment on Tax-free Childcare consultation

The childcare voucher providers welcome HM Treasury’s decision to issue a further consultation on the provision of accounts in Tax-free Childcare. The CVPA believes that any decision regarding the delivery mechanism for Tax-Free Childcare – a decision which is important for parents, carers and taxpayers - requires due and proper consideration.


Julian Foster, board member of the CVPA, said: “Government’s decision to consult on the most appropriate provider of Tax-free Childcare is a positive step. This will allow all interested parties, whether they be parents, childcare providers, taxpayers or childcare voucher providers, the chance to comment on this crucial element of the new scheme.


Support for childcare costs is vital for working parents. The voucher providers are keen to continue to work with Government to ensure parents are aware of, and receive, the support they are entitled to. The CVPA will, of course, be engaging fully with the consultation process.”


ENDS


Notes

  • Currently, 50,000 companies offer the scheme to 18m employees, with over 500,000 users. The scheme is popular with both large and small businesses, with 18,000 small businesses using the scheme for a single employee.
  • Childcare vouchers, which typically operate as an employee salary sacrifice benefit, allow parents to sacrifice up to £55 a week (for basic rate tax payers), from their pre-tax salary. Through the exemption of income tax and National Insurance Contributions, the scheme provides the average family savings of at least £1,800 per annum towards their childcare costs.
  • Under the current voucher system, basic rate taxpayers can save £933 each per annum, whilst higher rate tax payers save £623.
  • Support, through childcare vouchers, is provided to parents with children up to the age of 15. This ensures that once a child reaches school age parents are able to fund breakfast and after-school clubs to allow them to return or remain in employment, fitting their family responsibilities with work commitments.
  • Childcare vouchers provide the only form of childcare support that is linked to a parent’s employer. They are cost-neutral for businesses, and have low administrative burden – taking up only 15 minutes of administrative time per month. For this reason, they are widely used by SMEs and large corporations alike.