Tax-Free Childcare update

08 June 2017

The Childcare Voucher Providers Association (CVPA) has highlighted that there have been a wide range of difficulties reported so far by parents.

According to Nursery World a number of providers have reported not being able to sign up to Tax-Free Childcare (TFC), either because they have not received a temporary password from HMRC, or the one they have been sent doesn’t work.

It follows concerns by the CVPA that parents wanting to use TFC will be ‘left in the lurch’ because only a third of providers in the UK have signed up to the scheme.

The CVPA is urging parents to think carefully before switching irreversibly from childcare vouchers to TFC – not just because of the issues reported so far, but also because many families could actually be worse off financially through TFC compared to childcare vouchers.

The CVPA is also calling on the government to reconsider their plans to close vouchers to new users from April next year, as they believe it is far too premature to close off a popular, well-established and functioning scheme

CIPP comment

HMRC is aware of the issues being experienced by some parents and while these are being resolved, employers can help their employees by telling them about the new Childcare Choices website. It includes a useful Childcare Calculator for parents to compare all the government’s childcare offers and check what works best for their families.

Although employers have no mandatory role in regard to TFC, they can certainly help employees by directing them to information, helping them identify which scheme is best for their circumstances (where Employer-Supported Childcare is still an option), and could arrange voluntary deductions through payroll into accounts.