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Budget 2017 - Tax Free Childcare Update

15 Mar 2017

As you will be aware, the Chancellor delivered his budget speech on the 8th of March. Detailed below is an overview of the announcements made which are relevant to care-4:-
 
Tax Free Childcare (TFC)

The Chancellor announced that TFC will be introduced from next month in a controlled way.  It will then gradually roll out with parents of younger children able to apply first and all eligible children (up to age 12) by the end of 2017.  Parents will be able to apply for all of their children at the same time, when their youngest child qualifies. 
 
care-4 will remain open for new joiners until April 2018. Participants in our scheme will be grandfathered and therefore able to enjoy the current tax benefits on an ongoing basis. It will not be possible to participate in both employer supported childcare (care-4) and TFC.
 
We expect to receive more details about the TFC roll out from the Government shortly and will provide a further update as soon as we can. 
   
Working parents

The Government also re-confirmed that parents with children who are three and four years old will see their free childcare entitlement increase from 15 hours to 30 hours a week from September 2017. 
 
You will be able to apply for both Tax-Free Childcare and 30 hours free childcare at the same time, through a joint childcare service. Parents can now sign up to receive an email update which will notify you when you are able to apply. 

Autumn Statement 2016 - Tax Free Childcare Update

07 Dec 2016

Tax Free Childcare (TFC)

In the Autumn Statement the Chancellor confirmed that Tax-free Childcare will be rolled out gradually from early next year, pending completion of a trial. A date has yet to be confirmed for the start of the trial however, we will continue to keep you fully updated on developments throughout next year.
 
The Chancellor reiterated his plans to extend free childcare for working families to 30 hours, from September next year
 
Salary Sacrifice

Following the recent salary sacrifice consultation, The Chancellor announced that tax and employer National Insurance advantages for salary sacrifice will be removed from April 2017.  
 
The plans to remove tax and employer National Insurance advantages for salary sacrifice from April 2017 will NOT include employer supported childcare therefore you can continue to use care-4 scheme through salary sacrifice after April 2017. 

 

Tax Free Childcare Update following 2016 Budget

21 Mar 2016

Budget 2016 Update

As you will be aware, the Chancellor delivered his budget speech on Wednesday 16th March. Detailed below is an overview of the announcements made which we believe would be of particular interest to you:-
 
Tax Free Childcare (TFC)

The Government still plan to introduce TFC in early 2017, however, on Wednesday they provided further detail of their plans.  They announced that TFC will be gradually rolled out in a managed way with parents of youngest children eligible to enter the scheme first and all parents of children under 12 being eligible by the end of 2017.
 
Confirmation was provided of the final date that employees can join care-4 as part of the TFC roll out.  The Chancellor advised that Employer Supported Childcare (ESC) schemes such as care-4 will remain open for new joiners until April 2018, to support the transition between the two schemes. 
 
ESC will continue to be grandfathered as originally planned.  As such all parents that have joined the care-4 scheme before April 2018 can continue to save on their childcare costs through care-4 until they are no longer eligible or it is not required. 
  
Salary Sacrifice

On Wednesday, the Chancellor confirmed the Government’s intention that childcare (care-4), health-related benefits such as our cycle to work scheme and pension saving, should continue to benefit from income tax and NICs relief when provided through salary sacrifice arrangements.
  
 
Full details of the budget can be found at:-https://www.gov.uk/government/publications/budget-2016-documents/budget-2016

Tax Free Childcare Update

18 Dec 2015

The Government has reconfirmed that T​ax Free Childcare (T​FC​)​ will commence from 2017.
 
Eligibility requirements for TFC:-

· Parents will need to have a weekly income level equivalent to 16 hours, an increase from the 8 hours minimum previously advised.
· The new upper income limit per parent will change from £150,000 to £100,000. 
 
The Government’s documents state that as some families will no longer be eligible for TFC, they may choose to remain on ESC schemes such as care-4.
 
We were able to raise a number of questions with the government regarding TFCas follows:-
 
Q. If you are participating in care-4, can you use the scheme to pay for a baby that is born after the launch of TFC?
 
A. Yes, the benefit is per employee and not per child.
 
Q. If you are participating in care-4, can you have a break in salary sacrifice payments and still be eligible to save through the scheme?
 
A. Yes, provided that you have a) remained with the same employer, b) not had a break in salary sacrifice of 12 months or more and c) have not participated in TFC during the break.
 
Q. If you are transferred from one business to another as part of a TUPE arrangement, can your participation in care-4 continue?
 
A. Yes, if you transfer under TUPE arrangements you can continue to benefit from savings through care-4.
 
Q. If you move from one part of a Company to another and are required to have a new employment contract, can you continue in care-4 once TFC has launched?
 
A. No, if your employment contract changes, the salary sacrifice for care-4 is severed and you would need to join TFC to save on your childcare costs.

Extended 30 hours free childcare element

The eligibility requirements for TFC will also apply to the extended 30 hour free childcare element to be introduced.
 
Eligibility for the 30 hours of free childcare has also been extended to families where a parent or their partner is in work and the other parent is disabled or a carer; or where a parent or their partner is taking time away from work on paid sickness or parental leave. This will not apply for TFC.
 
Following its review of childcare provision, the Government will invest to increase the average hourly rate childcare providers receive. It will also seek to create additional places in nurseries.

Tax Free Childcare Update

18 Dec 2015

The Government has reconfirmed that T​ax Free Childcare (T​FC​)​ will commence from 2017.
 
Eligibility requirements for TFC will be more stringent:-
· Parents will need to have a weekly income level equivalent to 16 hours, an increase from the 8 hours minimum previously advised.
· The new upper income limit per parent will change from £150,000 to £100,000. 
 
The Government’s documents state that as some families will no longer be eligible for TFC, they may choose to remain on ESC schemes such as care-4.
 
We were able to raise a number of questions with the government regarding TFC, which were answered at a recent meeting with the Treasury as follows:-
 
Q. If an employee is participating in care-4, can they use the scheme to pay for a baby that is born after the launch of TFC?
 
A. Yes, the benefit is per employee and not per child.
 
Q. If an employee is participating in care-4, can they have a break in salary sacrifice payments and still be eligible to save through the scheme?
 
A. Yes, provided that the employee has a) remained with the same employer, b) not had a break in salary sacrifice of 12 months or more and c) has not participated in TFC during the break.
 
Q. If an employee is transferred from one business to another as part of a TUPE arrangement, can their participation in employer supported childcare (care-4) continue?
 
A. Yes, an employee that transfers under TUPE arrangements can continue to benefit from savings through care-4.
 
Q. If an employee moves from one part of a Company to another and is required to have a new employment contract, can they continue in employer supported childcare (care-4) once TFC has launched?
 
A. No, if their employment contract changes, the salary sacrifice for care-4 is severed and the employee would need to join TFC to save on their childcare costs.

Extended 30 hours free childcare element

The eligibility requirements for TFC will also apply to the extended 30 hour free childcare element to be introduced.
 
Eligibility for the 30 hours of free childcare has also been extended to families where a parent or their partner (if they have one) is in work and the other parent is disabled or a carer; or where a parent or their partner is taking time away from work on paid sickness or parental leave. This will not apply for TFC.
 
Following its review of childcare provision, the Government will invest to increase the average hourly rate childcare providers receive. It will also seek to create additional places in nurseries.

Second reading of the Childcare Bill

​It was confirmed at the Second Reading of the Childcare Bill that parents will be able to apply for both TFC and the 30 hours via a joint online application being developed by HMRC.
​ 
This is intended to provide a simple and straightforward way for working parents to apply for both schemes, avoiding the need to provide the same information twice, saving them time.  
 
Free childcare will continue to be provided through Local Authorities and TFC support will take the form of Top Ups paid into Childcare accounts.  The joint childcare application is expected to be available to support the introduction of TFC from early 2017, and the 30 hours free childcare offer from September 2017.

TFC revised launch date

02 Jul 2015

On 1st July the Government’s Director of the Tax Free Childcare programme provided an update about it’s launch.  
 
You may be aware that there has been a legal challenge on HMRC’s decision to work in partnership with NS&I for the delivery of TFC.  Yesterday, the Supreme Court found the Government’s proposals for delivering TFC to be lawful. 

The Government has made it clear that it is committed to delivering TFC, however, they have now confirmed that they expect it to be launched from early 2017.

This is great news for those of you that are keen to use care-4, as they have now confirmed that new joiners will be able to join our scheme until the revised TFC launch date in early 2017.  In addition, they have reiterated that if you are in care-4 at the time of the launch, you will be able to continue to save through the scheme provided that your employer continues to offer this benefit.
If you are eligible to join the scheme, don’t delay, make savings on your childcare costs now by clicking on “Register me” now.  If you are an employer that is looking to provide this benefit to your employees, please contact info@care-4.co.uk.

Childcare Update

11 Jun 2015

Last week David Cameron introduced a change to the Childcare Bill, which will double free childcare available to all working parents of 3 and 4 year olds.  The change, with Parents set to benefit from 30 hours of free childcare, was initially planned to commence from 2017.  A new Government taskforce is in place to introduce the changes which have now been pushed forward, with pilots in some areas starting as early as September next year.   David Cameron has also promised a review of the Childcare funding rates by the Department for Education before the summer.

The last Government also put in place support for working families through the introduction of Tax Free Childcare (TFC), which is proposed to launch in Autumn this year.  Employer Supported Childcare schemes like care-4 will continue for participating parents when TFC launches, but it is important for working parents to join before the launch of TFC to be best placed to choose the best savings available to them.  Full details of TFC are included in the Childcare Payments Act 2014, which can be found here.

New Childcare and Family Services Finder

08 Apr 2015

If you are looking for registered childcare in England, Family and Childcare Trust have now launched a handy search engine for Ofsted approved childcare. For further information please click below.

Read more...

Tax Free Childcare Update

01 Aug 2014

Following the Government's further consultation for Tax Free Childcare which ended on 27th June, they have now confirmed their decision:-  "The government has carefully considered the responses to both consultations and the evidence on all of the options. The government’s decision is that National Savings and Investment (NS&I) will be the scheme’s account provider, working in partnership with Her Majesty’s Revenue and Customs (HMRC)."

The full consultation response document can be found here

The Government plans to launch Tax Free Childcare in Autumn 2015, at which time employer supported childcare will be grandfathered, with any employees who are participating in care-4 at that time able to continue to save through the scheme.

Tax Free Childcare Update

06 Jun 2014

Further Consultation Window Opened

The Government have recently launched a further consultation on the provision of Tax Free Childcare, which will be open until 27th June. The consultation builds on the previous exercise that was undertaken last year, but focuses only on the options for delivering the Tax Free Childcare accounts, as follows:-

1) Government Provider - Through NS&I or HMRC

2) Private Sector  - Single Provider, Small limited number of Providers, or an Open Market

A copy of the consultation document can be found here  
 
The CVPA would like parent’s views

The Childcare Voucher Providers Association are interested in parent’s views, if you would like to respond, the survey can be found here 

Childcare Payments Bill Published

The Government published its Childcare Payments Bill yesterday, which will set down the legislation for Tax Free Childcare.  The Bill can be found here 

Tax Free Childcare Update

18 Mar 2014

You may be aware that the Government have made an announcement today, following their consultation last year on Tax Free Childcare.

In Summary:-
· Tax Free Childcare will be introduced from Autumn 2015, as originally planned.
 
· The Government Subsidy remains at 20%, but has now been increased to childcare costs of £10,000 per child per year, rather than the original plan of £6,000. This will enable parents to save up to £2,000 per year, per child.
 
· The Government originally planned to provide for children up to the age of 5 and increase per year until age 12. They have now confirmed that children up to age 12 will be included within the first year from Autumn 2015.
 
· Employees earning £50 per week, on leave (maternity, paternity, adoption, sick) who do not currently meet the requirement can receive the subsidy.
 
· New online Tax free Childcare accounts will be run by HMRC in partnership with NS&I, requiring all systems to be developed in their entirety before launch in Autumn 2015.
 
· Where families have an additional rate tax payer, or are receiving support through Tax Credits, no subsidy will be provided.
 
Many parents may be better off with the current Employer Provided Childcare Scheme available through your Employer. You can save up to £933 per year of your childcare costs, per employee, by joining the scheme now. The Government have confirmed that if you have joined the scheme before Autumn 2015 you will be able to continue to receive benefit for as long as you and your employer participate in this benefit. No new joiners will be allowed from Autumn 2015, when Tax Free Childcare is introduced. A number of companies were involved in the consultation and it was clear that many employers sought a role in the new policy.  Currently it is anticipated that the new Tax free childcare programme will provided separately to any benefits programmes run through your employer.

Please click here for the Government's response to the Consultaion about tax free childcare
We will keep you informed of any further updates. 

For further details about Tax Free Childcare, please contact HMRC on 0300 200 1919.
 

Government proposes a new tax free childcare scheme from Autumn 2015

18 Feb 2014

Tax-Free Childcare will be available to all working parents where both parents are in paid work or where the family is single parent.
 
20% of childcare costs will be funded per child up to a maximum of £1200 per year.  (Parents will need to contribute £4800 to receive £1200).
 
At date of launch, the eligible age of a child is from birth to 5 years. Although the scheme age limit will increase year on year until the maximum age of 12 years, unless a child is disabled in which case age 16.
 
Additional rate tax payers, parents where only one parent works, or children aged over 5 years will not be able to benefit from support with their childcare if joining a scheme for the first time after Tax-Free Childcare is launched in Autumn 2015.
 
Current care-4 scheme (employer provided childcare) will be “grandfathered” and remain after the launch of the Tax-free Childcare Scheme. Parents that are signed up before the launch will be able to continue, but can switch if they will save more in the new Tax-Free Childcare Scheme.
 
The new scheme and the mechanism for parent payments and Government funding has not yet been designed, although the latest proposal is that parents will need to reconfirm eligibility every 3 months to avoid issues of overpayment.
 
The eligibility criteria for paying registered or approved carers will remain.
 
Please click on the below link for full details:- 
 
Tax-Free Childcare: Consultation on Design and Operation
 
 
Anticipated key milestones
 
February 2014:
Full Consultation response will be published
 
Early 2014:                              
Draft legislative bill prepared and consulted on
 
Summer 2014 – Spring 2015:   
Legislation passed through Parliament
 
Autumn 2015:                          
Scheme goes live
 
We will continue to keep you updated over the coming months.
 
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As a result of the developing situation with regards to the current Covid-19 outbreak and, in particular, the recent government announcement regarding school closures, we wanted to provide you with some further information to help you make an informed choice regarding your care-4 participation.
 
Should I continue paying into my account if I'm now spending less on childcare?
Whilst we acknowledge that the current situation is very uncertain, if you are likely to require childcare in the future, we recommend that you continue with your salary deductions (remembering that you can choose to reduce the value temporarily if required).
 
Can I reduce my monthly salary deduction temporarily?
Yes – this can be done either via your online care-4 account or, if your employer operates a Flexible Benefits scheme, through your Benefits Provider platform. The value can subsequently be increased as and when required.
 
What are my options if I have been furloughed?
Whilst initially, guidance seemed to suggest that employees could continue to have deductions from gross salary whilst on furlough, a more recent update means that salary sacrifice cannot be taken from the pay an employee receives through the furlough grant. However, employers can choose to pay these benefits in addition to wages paid under the Job Retention Scheme.

Depending on the arrangements your employer has in place, this might mean that furloughed participants would need to pause their salary sacrifice arrangements until their normal contract is resumed. As Covid-19 is being classed as a life event it is entirely acceptable for individuals to make temporary changes to their salary sacrifice arrangements as a result.

If you have been furloughed you should discuss your options with your employer, as any payment of childcare vouchers during the period of Furlough would be dependent on their own specific arrangements.

If I leave the scheme can I re-join?
Yes, you can choose to temporarily leave the scheme (i.e. pause your salary deductions) but please be aware that in line with new Tax Free Childcare regulations, you must ensure that you restart deductions within 12 months - if you fail to do so then unfortunately you will be unable to re-join the scheme.
 
Can I withdraw my funds?
Due to HMRC regulations which your employer must adhere to, you are unable to convert any excess balance in your account to cash by way of a refund. Instead, accrued funds will remain in your secure care-4 account for use in payment to eligible carers at a later date.
 
Are the funds in my account safe?
Yes. All funds received from our clients in respect of childcare payments are deposited and held in specifically designated bank accounts which are used solely for the purpose of handling care-4 client funds. The operational procedures we have in place illustrate that all such funds are client monies. 
 
Should you require further assistance please contact us either via email at: info@care-4.co.uk or by calling our helpline on 0344 800 1444.