Act Now Or Miss Out: Countdown Is On For April Childcare Voucher Changes
UK higher and additional rate tax-payers have just 39 days left to act before they could miss out on thousands of pounds in savings on registered childcare, warns leading childcare voucher provider Computershare Voucher Services (CVS).
The Government is reducing the level of tax relief on childcare vouchers for higher and additional rate tax-payers who sign up to the scheme after 5 April. This means some working parents could lose up to 50% of the available tax and NI savings if they don’t act now – which could amount to as much as £1144 every year.
After April 5, any new entrants to voucher schemes on higher rate tax will only be able to claim up to £28 per week and additional rate tax payers only £22, when currently it’s £55 for everyone.
According to the Institute for Fiscal Studies (IFS), a further 750,000 people are expected to be bumped into the higher rate bracket when bandings are changed in April.
Julian Foster, managing director of CVS said: “April is fast approaching and, with the tax bands changing, many workers may be unaware that they risk losing out on substantial savings if they fail to sign up to a childcare voucher scheme before April 6 – because they may not know that they are about to become a higher rate tax payer.”
Childcare costs continue to soar, making the savings offered by the childcare vouchers scheme more important than ever. The cost of a nursery place for a child aged over two has risen twice as quickly as wages, according to a recent survey by the Daycare Trust, which says fees have increased by 4.8% since last year.
Julian added: “Childcare vouchers are a fantastic way to make substantial savings on all sorts of registered childcare, including holiday and after school clubs, plus many extra curricular activities such as music lessons. So if you’re a new parent and earn £42,475 or more and you’re not currently in a scheme, act now or you miss out.”
Mike Warburton at Grant Thornton said: “This is the last chance saloon for existing higher rate taxpayers to benefit in full from this valuable relief, together with potentially 750,000 others about to be pulled into the higher rate club by the Chancellor’s measures.”
Computershare Voucher Services is the largest dedicated childcare voucher provider, handling childcare vouchers for around 110,000 working parents every month, via more than 14,000 organisations.