 In the autumn statement the Chancellor outlined that, from April 2017, most salary sacrifice schemes will be subject to the same tax as cash income. There are some exceptions, including childcare vouchers which remain unchanged and will still attract tax and NI savings. As the threshold for the higher rate of tax will also be raised, the numbers of people who can purchase child care vouchers as basic rate taxpayers will increase from 2017. (The amounts of childcare vouchers allowable varies between basic rate and higher tax payers). Whilst there are other purchase criteria, vouchers can be used for care for a child up to 15. Following, so far?
Within the detail of the statement it is noted that tax free childcare will be introduced gradually from early 2017. Following completion of a trial, the government will review its operation. Tax-Free Childcare, (proposed in 2014), will be gradually rolled out from early 2017, and will replace the existing Childcare Voucher Scheme in April 2018. At which time, the child care voucher scheme will be closed for new entrants. Subject to eligibility, tax-Free Childcare offers to cover 20% of childcare costs (up to £2,000 per child, per year), for children up to the age of 12. Still with us? Some of the childcare voucher providers are giving very clear advice on the benefits and arrangements for both the schemes. As far as they can. It is assumed the trial may prompt changes on tax free arrangements. Employers too would be wise to dedicate resources to keep their staff informed. Those going on parental leave in 2017 need to be kept up to date on the choices that they have. Affordable childcare may be crucial in enabling valued staff to return to work. The current situation increases uncertainty for all and needs to be dealt with. Albeit, for those who are need to understand the nuances of maternity leave/pay, shared parental leave (etc.), maybe childcare support is just another puzzle for grown-ups. Image <a href='http://www.123rf.com/profile_stuartphoto'>stuartphoto / 123RF Stock Photo</a> Comments are closed.
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April 2020
New E- Books on Bookboon. We have published eight ebooks with Bookboon. Each gives practical HR advice on topics that matter. Including, change management, health and wellbeing, productivity and managing a remote workforce. Photo <ahref='https://www.123rf.com/profile_modella'>modella / 123RF Stock |