As many employees began working from home during the height of the coronavirus pandemic, they used less paid childcare, as many before school clubs and nurseries were closed.

Therefore, employees who use the childcare voucher scheme will most likely have unspent vouchers in their related accounts if they did not reduce their contributions – which come directly and automatically from their salaries.

To avoid a stockpile of childcare vouchers, employers must reminder their employees that they can decrease their contribution to a lower amount, as long as both sides agree. These contributions can increase later on, and varying the amount will not affect eligibility to the scheme if the original scheme conditions are met.

Tax-Free Childcare

Although, if your employees undergo a salary sacrifice to receive these childcare vouchers, then you could check to see if the Tax-Free Childcare (TFC) would suit them better.

Under this support, parents receive an extra £2 from the Government for every £8 they pay into a childcare account. Every year, eligible working parents can get up to £2,000 per child under 12 years old and £4,000 per child under 17 years old who are disabled.

For more information or advice on the childcare voucher scheme and contributions, please contact our experts today. 

Posted in Blog.