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The new tax-free childcare scheme

Almost 2 million families will be able to make use of the tax-free childcare scheme announced in the last Budget, according to estimates.

Tax-free childcare scheme

Under the scheme, eligible families will be able to claim a 20 per cent rebate on their childcare costs up to a limit of £2,000 per child.

Putting the scheme in context, the Government pointed to research that showed that nearly a quarter of employed mothers would increase their working hours if they could arrange good quality childcare that was convenient, reliable and affordable.

Comparisons with the Childcare Voucher Scheme

While many parents will benefit from the new arrangements, others will be worse off, but it will depend on personal circumstances. For instance, a working couple with one child paying around £5,000 a year for childcare will be worse off, but with two children they will do better.

Commentators noted that when only one parent in a couple works, neither will be eligible for the new scheme, but couples with joint incomes up to £300,000 will be.

Research has found that nearly nine in ten employers currently offer childcare vouchers to staff, which are reported to be used 'more intensively' by working lone parents than by couples.

Unlike the existing Childcare Voucher Scheme, the new scheme will not support parents of children aged between 12 and 15, unless the child is disabled. But employees will be able to use the existing voucher scheme until their child reaches 15 if they stay with the same employer.

Until the new scheme comes into force in autumn 2015, it will still be possible to sign up to the current voucher scheme. However, it will not be possible to claim under both systems.

Acas publications and services

Acas can help you support working parents by working with you to develop and implement effective flexible working policies. See Parents and carers: how Acas can help for details.

Acas training is also available on Flexible working, and effectively implementing a new pay and rewards system by varying Contracts and terms and conditions.

For free, expert advice on any area of employment relations, call the Acas Helpline on 0300 123 1100.

Visit the Acas Training and Business Solutions area for more information.


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