The Government have announced this morning details of a new tax-free childcare scheme for working families. The full details are yet to be agreed and HMRC have confirmed that they will be in consultation with voucher providers and childcare providers over the upcoming months to agree exactly how the new system will work.

Our understanding from the limited information we have received so far is that it is expected that the existing childcare voucher scheme will continue as at present until Autumn 2015 and any parents in the scheme at this time will then be able to continue to take vouchers through their employer for another 5 years or choose to join the new scheme.

The proposed new scheme will be introduced from Autumn 2015 and will not require any employer involvement as parents will choose a voucher provider themselves and register directly online for the scheme there would be no salary deductions. The scheme will only be available if both parents are working and initially only open to children under the age of 5 but will be extended to under 12’s at a later stage. The government will pay 20% of the annual childcare costs up to £1,200 per annum for each child in childcare. A parent can only be in either the new scheme or old scheme not both

We have shown below a link to the press release from HM Treasury where you will find the full details of the proposal: www.hm-treasury.gov.uk/press_29_13.htm

At this stage we have no further information but will keep you updated as and when appropriate.