The Government is bringing in a new Tax-Free Childcare (TFC) scheme for working families. The scheme will eventually replace the childcare vouchers and directly contracted childcare provided by employers under the Employer Supported Childcare (ESC) scheme. Both childcare schemes are UK-wide.

Parents will not be able to simultaneously receive support from both ESC and TFC. Parents who wish to remain in ESC will be able to, while their current employer continues to offer the voucher scheme. There is no obligation to switch to TFC. However, existing voucher schemes will be closed to new applicants from April 2018.

E-Petition

E-petition 200585 calls on the Government to keep childcare vouchers open to parents alongside the TFC scheme. The petition, and the Government’s response, can be viewed on the e-petitions website.

To inform the debate, the Petitions Committee invited comments from the public on childcare vouchers, using the Money Saving Expert forum.

There is also an interactive ‘heat map’ of E-petition signatures, indicating the geographic concentration of signatories across the UK.

Briefing Papers

The Commons Library briefing paper – Childcare Vouchers and Tax-Free Childcare – Frequently Asked Questions (CBP08055) – provides an overview of the Childcare Vouchers and Tax-Free Childcare schemes and a comparison of their key features. It explores the ‘winners and losers’ under each scheme, considers how the schemes interact with welfare benefits, and outlines some other sources of help with childcare costs.

Commons Library briefing paper Tax relief for childcare (SN00019) provides the policy background to the Employer-Supported Childcare and Tax-Free Childcare schemes.

Parliamentary

In a Ministerial Statement on 15 November 2017 the Government updated Parliament on progress with rolling out the Tax-Free Childcare scheme.

Early Day Motion 755, tabled by Caroline Lucas on the 9 January 2018, calls on the Government to keep childcare vouchers open alongside Tax-Free Childcare.

The Treasury Committee has launched a new inquiry into childcare policy and its influence on the economy. The Committee will examine the role high quality, accessible, flexible and affordable childcare can play in supporting labour productivity. It will scrutinise the processes around how childcare schemes are delivered and the quality of childcare interfaces—such as the Childcare Service website and their previous failures. It will also consider the overall package of Government initiatives that aim to make childcare affordable, how the individual initiatives interact with each other and their effectiveness, and whether they have delivered an adequate provision of affordable childcare that facilitates parental employment. The deadline for submissions to the inquiry is Friday 9 February 2017.

Further Information

The Government has published a 10 point guide for parents which provides an overview of the Tax-Free Childcare scheme.

A report by the charity Working Families and the Childcare Voucher Providers Association – The future of childcare support for working parents (February 2017) – sets out points in favour of retaining childcare vouchers.

The Revenuebenefits website explains the background to Tax-Free Childcare, and links to the various public consultations on the scheme, and the relevant primary and secondary legislation.

A number of Parliamentary questions have been asked recently on the subject of childcare vouchers. Most of these can be found on the Parliamentary search website.

Related posts