In our previous article we looked at Tax-Free Childcare from the perspective of parents (click here to access the article and get rates, qualification and application details); in this article we’ll approach the scheme from the employer’s perspective – Tax Free Childcare and Employers, what you need to know.
As mentioned previously, Tax-Free Childcare is a government scheme to assist parents with their childcare costs. Companies can make payments into their employee’s childcare account. This can be done on behalf of the employee through the company payroll or supplementary payments can be made by the employer. If supplementary payments are made these are subject to appropriate deductions.
Tax-Free Childcare will replace Employer-Supported Childcare, i.e. the existing “childcare voucher” scheme. Employer-Supported Childcare will not be available to NEW entrants after April 2018, however, parents can CONTINUE using childcare vouchers after this date if their employer continues to support the scheme.
Employees need to provide their employer with a Childcare Account Notice (CAN) when moving from Employer-Supported Childcare to Tax-Free Childcare. A CAN is just written documentation, which can be in the form of an email, that states that the employee wishes to leave the employer’s voucher scheme and use Tax-Free Childcare. The employee has 90 days after opening a Tax-Free Childcare account to provide a CAN to their employer. Once you, the employer, have their CAN, you must terminate the employee’s access to Employer-Supported Childcare.
To assist your employees with their childcare decisions you should direct them to: www.childcarechoices.gov.uk
If your employees are considering childcare vouchers the following link will help them assess if it’s of benefit to them or not (as childcare vouchers may affect their tax credits): www.gov.uk/childcare-vouchers-better-off-calculator
If your employee wants to apply for Tax-Free Childcare or sign in to their childcare service account they can do so here.
As mentioned in our previous article on this topic (click here to read), for parents to avail of the Tax-Free Childcare scheme they must use a childcare provider that is signed-up to the scheme. Childcare providers can sign-up to Tax-Free Childcare here.
Here at Paycheck Plus we strive to make our clients become the best employers that they can be. As part of this we provide employee support services on behalf of our clients. This includes training, workshops and providing an employee helpline where our payroll specialists answer client employee queries and provide advice on minimising employee tax liability which ultimately increases their net take-home pay at no additional cost to the employer.
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For information and assistance on processing payroll for employees, call +353 (0)41 98 92 100 or Request a Callback from our Payroll Specialists today.
PaycheckPlus – Payroll Excellence