In the 2013 Budget the Government released details of proposed changes to the current childcare voucher scheme where in summary parents would contract directly with a voucher provider rather than through their employer. The Government have been through a consultation process to gain feedback on the proposed changes from voucher providers, parents, employers and childcare providers.

Following on from this, the Government has this week announced the results of the consultation and the final details of how the new Tax Free Childcare scheme will operate. Features of the new scheme include:

• The new Tax Free Childcare scheme will be introduced from Autumn 2015 and will allow eligible parents to save up to £2000 per child, per year.
• The scheme will be rolled out to all eligible parents with children aged under 12 within the first year of the schemes operation.
• Parents who are currently registered on the existing employer supported childcare voucher scheme will be able to remain on the scheme for as long as their employer continues to offer the scheme. However, if a parent changes employer after Autumn 2015 they will lose this entitlement.
• Parents will be able to choose whether they continue on the existing employer supported childcare voucher scheme or move to the new Tax Free Childcare scheme. However, they cannot be in receipt of support through both schemes at the same time.
• Not all parents will benefit from the new scheme and many may find they are better off remaining on the current childcare voucher scheme. Parents will be able to choose which scheme is more beneficial to them and their family. We are in the process of developing an online calculator which will assist parents in making the right choice.

As a childcare voucher provider and having been heavily involved throughout the consultation process we are understandably disappointed at the Government’s decision to exclude current childcare voucher providers from the new scheme and to instead award the contract to one single account provider - National Savings & Investments (NS&I).

Further information is available on the Tax Free Childcare scheme by visiting www.gov.uk or by telephoning 0300 200 1919.