Member Article

Employers should make their voices heard on new tax-free childcare

Busy Bees Benefits, is encouraging businesses to have their say about the Government’s proposed Tax-free Childcare scheme. The employee benefits provider conducted a survey of employers in July which demonstrated that there is currently a lack of awareness and understanding of the proposed scheme. From the autumn of 2015, working parents will be required to pay 80% of their child’s childcare costs and the Government will top it up with the remaining 20%. This will apply to childcare costs of up to £6,000 per child, per year, saving working parents up to £1,200 per child, per year.

In Busy Bees Benefits’ survey, 70% of employers did not know that the scheme would only apply initially to children up to the age of 5 and eventually would be for children aged under 12 (eligibility for disabled children will be up to 16). The current Childcare Voucher scheme applies to all children up to the age of 16.

A twelve-week consultation on the new scheme is asking for views on how it should be operated. Busy Bees Benefits is responding to the consultation in its own right and is working to get the best deal for employers who want to be involved. So, as with the current Childcare Voucher scheme, Busy Bees Benefits is asking the Government to ensure that if employers choose to continue to run a scheme for their employees, any administrative costs they pay on behalf of their staff are treated as a trivial benefit and will not require reporting on P11D submissions. Businesses who would like to avoid wading through the whole consultation document can give their views on the relevant section in Busy Bees Benefits’ survey at http://www.surveymonkey.com/s/HJFLXNZ

Employers who could benefit from NI savings of up to £402 per year for each employee on the current Childcare Voucher scheme, will not receive any savings under Tax-free Childcare. However, there are other intangible benefits for employers if they take a role in communicating to their employees and potential recruits about financial help with childcare. To help recruit the best candidate for a role, it is in employers’ interests to share information about the financial support available for parents. The same goes for providing information to those staff about to start maternity, paternity or adoption leave. These employees may think that returning to work is not an option for them, but with the support from Tax-free Childcare, it may make financial sense for them to do so.

To ensure that all working parents get as much support as possible with childcare costs, employers should offer a Childcare Voucher scheme now. More information can be found athttp://www.busybeesbenefits.com/employers/scheme-information.php

Busy Bees Benefits takes the position that the level of support should be higher when the Tax-free Childcare scheme is launched, and that to continue to provide meaningful support, it will need to keep pace with rising costs. You can sign an epetition to support this proposal at http://epetitions.direct.gov.uk/petitions/48405.

This was posted in Bdaily's Members' News section by John Woodward .