Tax free childcare milestones
02 March 2018
Closure of childcare voucher schemes to new entrants
Childcare vouchers schemes provided by the Employer are closing to new entrants from 6 April 2018. Parents who want to access their employer scheme will need to have received a voucher in the 52 weeks before 5 April 2018.
HMRC have provided updated guidance about the closure of vouchers on the GOV.UK website. HMRC have published guidance to help parents to understand and work out what might be the best option for them .
30 hours summer term (In England only)
The deadline for parents to apply or reconfirm their eligibility for 30 hours free childcare for the summer term is 31 March 2018. As with previous terms, HMRC recommend that parents apply early
Payment timelines
Some providers have raised concerns about the time it takes for payments to clear through childcare accounts and reach providers.
It takes 1 working day for payments to clear into a parent’s childcare account. Payments made after 6pm (or 9pm for debit cards) will take 2 working days to clear.
Payments from parent’s childcare accounts to their childcare providers are made via the BACs system, these payments take 3 working days to clear into provider’s bank accounts.
If a parent does not have sufficient cleared funds in their childcare account then the payment to their provider will fail.
HMRC have been writing to parents to tell them about these timelines and are also adding new functionality to parent’s childcare accounts to make it clearer as to what funds have been cleared.
The Low Income Tax Reform Group (LITRG) have updated their guidance for working parents on getting help towards the costs of childcare and recently highlighted their concerns, “we do not believe the government is providing enough guidance or support to help people navigate the system in order to choose between the schemes and understand how they interact”.
The LITRG response to the Treasury Committee inquiry into Childcare policy and its influence on the economy can be read in full at their website.