Your Childcare Vouchers communication toolkit
The Childcare Vouchers scheme has now closed to new entrants.
Unfortunately, the Government closed the Childcare Vouchers scheme to new entrants on 4th October 2018. This means that for parents looking to join Childcare Vouchers for the first time, that option is no longer available to them.
Those parents already on the Childcare Vouchers scheme can continue to benefit from the savings as long as their child remains eligible*, they stay with the same employer, and they have had a wage adjustment and received vouchers within any 12 month period.
It is important to communicate to your existing scheme members to prevent them from making a hasty decision before they move to Tax-Free Childcare. Many families would be better off staying on the Childcare Vouchers scheme, but once they leave to join Tax-Free Childcare, they cannot rejoin.
You can share our 'Parent's guide to Childcare Vouchers & Tax-Free Childcare' which has been updated with the latest advice since the closure of the scheme.
Tax-Free Childcare
The Childcare Vouchers scheme closed to new entrants on 4th October 2018
This is because the government launched a new scheme called Tax-Free Childcare (TFC) which changes the package of financial support it offers to working parents.
Key facts
- Those parents already on the Childcare Vouchers scheme can continue to benefit from the savings as long as their child remains eligible*, they stay with the same employer, and they have had a wage adjustment and received vouchers within any 12 month period
- Employers will also continue to benefit from up to £402/year savings in employer NI for every parent that stays on your scheme beyond this date
- Parents cannot benefit from the tax and NIC savings via the existing Childcare Vouchers scheme and the savings from the new TFC scheme at the same time
The rules around the new scheme are complex. The important action for employers is to prevent your scheme members from making a hasty decision, as once they leave Childcare Vouchers to join Tax-Free Childcare, they cannot rejoin.
The aim of your communication plan is to ensure that the savings from Childcare Vouchers are maximised for both your existing Childcare Voucher scheme members and for your organisation.
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Download the 'Employer's guide to Childcare Vouchers & Tax-Free Childcare' here →  |
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*Until 1st September after the child’s 15th birthday, or 1st September after their 16th birthday if they are disabled
Parent Guides
Download our frequently asked questions for parents and employees
Here are some of the more common questions we get from parents around Tax-Free Childcare. To help you answer any queries you are receiving, you can download them as a pdf document to share with your teams by clicking here →
Tools & forms
Basic earnings assessment tools
For employees who joined the Childcare Voucher scheme after 6th April 2011, you are required by HMRC to carry out a ‘Basic Earnings Assessment’. This is to establish what category of taxpayer an employee falls into and therefore how much tax and NI exemption they are eligible to receive.
The Basic Earnings Assessment is calculated by adding together basic salary and any applicable allowances (such as shift allowances or guaranteed overtime), plus any taxable benefits that they receive. An estimate of commission that is likely to be earned and guaranteed bonuses will be included; however any performance related or discretionary bonuses are not included.
Subsequently, the Basic Earnings Assessment will be carried out annually at the start of each tax year. The assessment then remains valid for the whole of the tax year, regardless of any changes in salary that the employee may experience.
For help and guidance with your basic earnings assessments, please contact HMRC, or refer page 10 of HMRC's guide here.
Basic earnings assessment calculator
To help you with the assessment, you can use our Basic Earnings Assessment calculator. Please complete each column where relevant and the cells in yellow will be calculated automatically. Cell C5 should be completed with the annual value of Childcare Vouchers requested by the employee. Please note, We do not require a copy of this, it is for your own records.
*Figures correct as at 6th March 2024 for tax year 2024-25, subject to legislation being passed following the Spring 24 budget
Income tax rates and thresholds for Scottish taxpayers
Please note that since April 2017, the income tax rates and bands payable by Scottish taxpayers are set annually by the Scottish Parliament. However, Scottish employees are to have their Basic Earnings Assessment for Childcare Vouchers exemption entitlement calculated based on the same thresholds as the rest of the UK. This means that you can assess Scottish taxpayers using the same Basic Earnings Assessment calculator provided.
Communicating exemption entitlement changes
To help you communicate any changes in exemption entitlement to individual employees as a result of the Basic Earnings Assessment, you can download the suggested email templates below.
- Basic to Higher →
- Basic to Additional →
- Higher to Basic →
- Higher to Additional →
- Additional to Basic →
- Additional to Higher →
Please note; anyone who joined your scheme on or before the 5th April 2011 is entitled to £55 a week tax and NI exempt regardless of the level of tax they pay and therefore do not require an assessment.
Salary sacrifice agreement form
For schemes that require the use of Salary Sacrifice Agreement forms, a basic template has been provided below*.
*Please note that the accompanying documents which refer to Childcare Vouchers are provided only for your consideration and should not be accepted by you without a prior review by your own representative responsible for employee contracts. Our offer of these employee-facing documents is not intended as advice concerning salary sacrifice, employment law or any other matter which may be relevant to this type of amendment of a contract of employment