The future of childcare vouchers
Since their introduction to UK workplaces by Accor Services in 1989, childcare vouchers have been one of the most practical and cost effective ways for employers to support working parents.
Here, Patrick Langlois, managing director of Accor Services, discusses the impact of the Government's recent announcement relating to childcare vouchers and the subsequent campaign to retain the tax breaks.
On 29 September 2009, the Government announced their plans to cease the tax and National Insurance exemptions for childcare vouchers by 2015 (see information box below). This means the future of childcare vouchers as a flexible and straightforward solution that has enabled hundreds of thousands of working parents to source reputable, reliable childcare, became less certain.
Campaigning to protect your benefits
We are proud to be the organisation that first introduced childcare vouchers to UK workplaces twenty years ago. At the time, and to this day, we recognised employers' need to support and engage their working parents, as well as the struggle many working parents face trying to negotiate reliable, quality childcare, the cost of which is often prohibitive. Working parents continue to need support to balance their personal and professional lives and we are working hard to ensure that childcare vouchers continue to be available to them as a tax efficient employee benefit for many years to come.
As part of our campaign to help this happen, we have teamed up with other childcare voucher providers to lobby the Government to change their plans and continue to let working parents enjoy the savings that childcare vouchers currently offer. You can show your support for childcare vouchers and this campaign by signing the petition on the Number 10 website: http://petitions.number10.gov.uk/keepvouchers
The campaign has already enjoyed huge success – demonstrating the popularity of the scheme.
- A group of influential senior MPs, including 9 former members of the Government, have written to the Prime Minister to express their concern about his decision
- An Early Day Motion put to Parliament to recognise the many benefits of childcare vouchers has attracted names of 88 MPs
- Reports show that Gordon Brown is seriously considering other options rather than phasing out the tax exemption
Testimonials to the importance of childcare voucher schemes from our clients, current beneficiaries of the scheme and their carers, would prove invaluable for us as we continue to lobby the Government to keep the exemptions. We would love to learn more about your experiences, so please email us today at expressopiniononccv@accorservices.co.uk
Communicate to clarify
While the future of childcare vouchers is debated and decided, employers need to make communication their number one priority. Line managers and employees must be kept informed about the latest developments and changes and how they, their income and their family may be affected. Speculation, worry and concern will thrive in an information vacuum so invest time and effort to help people discuss and be assured about what the announcement means in the long term.
A key message for any employer that currently offers childcare vouchers is to emphasise that it is currently business as usual for voucher recipients. Alongside planned and regular communication, continue to run your scheme as you do today; employees can continue to receive the significant tax advantages that childcare vouchers offer so make sure they’re not missing out due to misunderstanding, misinformation and a general lack of awareness.
And if you don't currently have a childcare voucher scheme in place, now – more than ever before – is the time to seize the opportunity and help your people make the most of the available savings.
Just what has the Government said about childcare vouchers?
The Government's announcement in relation to childcare vouchers refers to two separate changes:
- Employees who began their contractual right to receive childcare vouchers prior to April 2011 will continue to enjoy the exemptions provided to them (under the same contract) up to 2015.
- Employers who provide childcare vouchers to an employee under a related contract of employment which was initiated or modified after April 2011, will not be in a position to apply the current tax and National Insurance exemptions to that childcare vouchers benefit.
An employer may introduce a childcare voucher scheme at any point between now and 2011 and an employee may choose to receive childcare vouchers at any point between now and 2011 to enjoy the exemptions until 2015. It's important to note that until the Chancellor's annual Pre-Budget Statement on 9th December 2009, no definite information on this decision is available. However, early indicators suggest that the Government are considering other options.
