Tuesday, 21 October 2014

Parliamentary Review of Tax-free childcare

October 2014: Parliamentary Review of Tax-free childcare

On the 14th October 2014 the CVPA gave evidence to the Parliamentary Committee which is reviewing the Tax-Free Childcare bill.

The CVPA highlighted three main concerns about Tax-Free Childcare:

1.  The removal of employer input.  Childcare Vouchers are a vital part of employers’ family friendly policies.  Over 60% of companies surveyed would like to still be involved or support employees with childcare, even with no NI savings.  Childcare Vouchers play a vital role in helping parents return to work, especially after maternity leave. 

2.  Tax-Free Childcare is a less progressive scheme.  Many parents will be worse off under the new scheme, in particular basic rate tax payers with lower childcare costs.

3.  Details of how the new scheme will operate.  The complexity with quarterly eligibility checks and ring-fenced funds for each child is a cause for concern.

The CVPA have also expressed concerns on the appointment of NS&I.  Although a well-respected organisation, NS&I do not have experience of administering timely payments to childcare providers.  The lack of a structured tender process when appointing NS&I leads the CVPA to believe NS&I may not be the best value solution.

The Committee have also heard evidence from other stakeholders including childcare professional associations, NS&I, children’s charities, Mumsnet, Citizens Advice, payroll and personnel professional organisations, London School of Economics and Political Science and HMRC. 

The Committee must complete consideration of the bill by 5pm on Tuesday 28th October.

Friday, 3 October 2014

New Tax-Free Childcare – the real savings behind the headlines

New Tax-Free Childcare – the real savings behind the headlines

Since the Government’s announcement for a new Tax-Free Childcare scheme to be introduced in Autumn 2015, savings figures have been quoted that would impress any parent paying for childcare.  The Tax-Free Childcare scheme is set to replace the current employer supported childcare voucher scheme, and whilst some parents will be better off under the new scheme, the full story behind the headlines paints a slightly different picture. 
Wider Plan Ltd, the founders of KiddiVouchers childcare vouchers, has been conducting research comparing the savings made by existing KiddiVouchers scheme members with those which could be made under the new Tax-Free Childcare scheme.  KiddiVouchers scheme members were invited to use the online Tax-Free Childcare savings calculator at, with Wider Plan making a donation to Action for Children for each calculation made.

The results of the research were eye-opening: 60% of parents were found to be better off remaining in the existing childcare voucher scheme, and on average would save £400 more with childcare vouchers than with Tax-Free Childcare.  These figures highlight that it is important, now more than ever, for employers to make childcare vouchers available to parents to help them make the highest possible savings.  The good news for parents is that if they are in a childcare voucher scheme before the changes take place in Autumn 2015, they will be given the opportunity to choose which scheme provides the most value for them.  After the Autumn 2015 deadline however, the existing childcare voucher scheme will be closed to new joiners, so now is the time to act.    

Following the overwhelming response from parents, Wider Plan will be making a donation of £3,000 to Action for Children in support of their work to help the most vulnerable and neglected children and young people.  Alison Chalmers, director of Wider Plan said ‘Childcare costs can be a significant strain on parents’ salaries, so it’s really important that parents make the most of the saving opportunities available.  We are delighted with how many parents are using our Tax-Free Childcare savings calculator to work out which scheme will be best for them, and really pleased to be able to show our support for Action for Children’s great work at the same time.’