Amendments to timings surrounding Tax-Free Childcare payments
18 October 2019
The Childcare Service Team at Gov.UK has confirmed that, should you pay funds into your Tax-Free Childcare (TFC) account via bank transfer, the time taken for the monies to reach your designated childcare provider will be significantly reduced.
This will be a welcome change for affected parents as currently, it can take up to three working days for transferred funds to arrive at their intended destination. Payments that exceed £2,000 will still be subject to the potential three working day maximum transfer period.
If you make a deposit by bank transfer, it will now take approximately two hours for the funds to reach your childcare account, the government top-up is instantly applied and will appear immediately in ‘available funds’. If payments are made to the relevant childcare provider prior to 2:30 PM, they will receive the monies the same day but if they are sent after 2:30 PM, or on a weekend or bank holiday, they will arrive in the provider’s account the next working day.
Tax-Free Childcare was implemented to support the fact that entitlement to join Childcare Voucher schemes ceased in October 2018. It was intended that this would eventually replace the requirement for Childcare Voucher schemes. The latest edition of the Employer Bulletin discusses the issue of ‘stockpiled childcare vouchers’ and explains the obligation on employers to advise employees in relation to the value of childcare vouchers they have. This is because circumstances may have changed which means they can no longer utilise those vouchers or because the vouchers will soon expire. There are also some helpful frequently asked questions providing advice for employers on both Tax-Free Childcare and Childcare Vouchers.
The CIPP is still part of the Tax-Free Childcare implementation forum, so if there are any comments, concerns or positive feedback on this area, please contact the Policy team so that we can share your thoughts and ideas and potentially shape the future of TFC.
Information provided in this news article may be subject to change. Please make note of the date of publication to ensure that you are viewing up to date information. Download the CIPP's Payroll: Need to know - your guide to payroll legislation and reporting for the most up to date data.