Employee childcare scheme
Tax-Free Childcare from HM Government
From 5 October 2018 employees will need to apply for Tax-Free Childcare (TFC) directly from HM Government. Tax-Free Childcare is a new government scheme that helps working parents with their childcare costs.
Employees can find information on TFC and how to apply by visiting the Childcare Choices website
What's happening to childcare vouchers?
Employer Supported Childcare (ESC)
On 4 October 2018, the childcare voucher scheme will close to new applicants. Employees can keep getting vouchers if:
They've signed up, have their first wage adjustment and be in receipt of vouchers before midnight on 4 October 2018.
Stay with the same employer, who continues to run the scheme.
Don't have a break in receiving vouchers of a year or more, for instance when taking an unpaid career break.
From 5 October, if an employee moves with their work under a business transfer covered by the Transfer of Undertakings (Protection of Employment) rules, the employee's terms and conditions will remain the same. In this case, either the employee can join any existing childcare voucher scheme their new employer runs, or their new employer can start a new scheme for them, if they don't already have one.
What you need to do if your employee receives childcare vouchers and starts using Tax-Free Childcare
If your employee tells you they've started using Tax-Free Childcare, you'll need to stop giving them childcare vouchers.
If this means stopping or changing a salary sacrifice arrangement, you must also update your employee's contract and your payroll software.
What your employee needs to do
Your employee needs to tell you in writing (for example, by email) within 90 days if they get Tax-Free Childcare, so you can stop giving them vouchers. It's the parent's responsibility to tell you.
Parents can continue to use any vouchers they already have, including to make a joint payment for childcare with Tax-Free Childcare. There's no deadline for using their existing vouchers. Once they've told you they're getting Tax-Free Childcare, they can't re-join your voucher scheme later on.
If you have any queries, please email: payroll.pensions.tech@sunderland.gov.uk
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