Childcare voucher and directly contracted childcare schemes
18 May 2018
HMRC has provided an update regarding the announcement that employer-supported childcare schemes are to remain open to new entrants for a further six months, until 4 October 2018.
“On 13 March the Government announced that the employer-supported childcare schemes, namely childcare vouchers and directly contracted childcare would remain open to new entrants for an additional 6 months, until 4 October 2018.
We recognise that this decision may have created some practical difficulties for some employers. As an employer, you can continue to allow your employees to join your childcare voucher or directly contracted childcare schemes up until 4 October 2018 (as long as they have joined a scheme and received their first voucher by that date). This means that you and your employees can keep taking advantage of the income tax and National Insurance reliefs.
However, we understand that some employers may have closed their scheme to new entrants on 5 April 2018, (the date originally stated), and it may be challenging to re-open it for the 6-month extension.
Any scheme which has tax and National Insurance contributions advantages must normally be open to all employees. As a temporary measure, we will use our collection and management powers to allow the tax and National Insurance contributions advantages to continue for employees enrolled in a childcare voucher - or directly contracted childcare scheme - on or before 5 April 2018; even where employers choose not to re-open their schemes.”
We have asked HMRC exactly how this will work in practice; we await their response and will keep you informed.