Childcare Vouchers to remain open to new entrants for an additional 6 months

19 March 2018

Following the announcement that Childcare Vouchers are to remain open to new entrants for an additional 6 months, HMRC has produced a newsletter covering the detail of change.

The newsletter tells parents and employers what they need to know and also includes links to updated information, in particular the communications toolkit - a useful resource to inform employees and other stakeholders about the change.

Change to closure of childcare vouchers to new entrants

CIPP comment

An e-petition on the UK Government and Parliament website was started in October 2017 to keep Childcare Vouchers open beyond April 2018.

A parliamentary debate took place on 15 January at which point the petition had received over 116,000 signatures (when the 6 month petition closed on 18 March it had received 119,578 signatures).

The plea to keep Childcare Vouchers open beyond April 2018 was considered in this debate, but not agreed to.

A number of organisations, including the charity Working Families and the Childcare Voucher Providers Association, have also called on the government to keep childcare vouchers open to parents alongside the TFC scheme on the grounds that:

  • Childcare vouchers are widely-used and popular with parents and employers
  • Some families will lose out under Tax-Free Childcare, compared to childcare vouchers
  • Vouchers provide a way for employers to demonstrate their commitment to supporting family-friendly working practices

The subject was then debated in parliament a second time within a Universal Credit debate on 13 March and this time the decision to delay closure to new entrants for six months was announced.

DUP MP Emma Little-Pengelly said while the employer-backed scheme - which was to remain open to existing members - was "far from perfect", it had enabled many parents to reduce the cost of childcare.

According to BBC News the MP said that the DUP is delighted that the government has agreed with their proposal to delay the scheme's closure for a period of at least six months which will be used to address concerns raised about the scheme and to look at new provisions to address childcare accessibility and affordability in Northern Ireland and throughout the UK.

As one member of the debate said, “We live in strange political times”.

The turnaround from government has come with only three weeks until the start of the new tax year. Many parents and employers will have already made decisions based on the information that childcare vouchers would no longer be open to new entrants from 6 April 2018.

The CIPP do welcome the six month reprieve but appeal to government to consider earlier changes when it is so apparent that there is a wide call for it.