Childcare vouchers - The scheme that gives you more to play with

Unfortunately, the Government closed the Childcare Vouchers scheme to new entrants on 4th October 2018. This means that if you’re a parent looking to join Childcare Vouchers for the first time that option is no longer available to you. This is because the Government launched a new scheme called Tax-Free Childcare.

If you have missed out on the savings from Childcare Vouchers due to this Government decision, you can still have your voice heard by visiting futureofchildcaresupport.com to share your story.

Whether you can receive a salary alternative to vouchers you have accrued will depend on the conditions of the scheme determined by your employer in the agreement you signed up to. Please consult those conditions and discuss them with your employer if necessary. It is quite common that employers’ schemes do not allow for this.

However, as Childcare Vouchers can be used for out of school and holiday clubs for children up to the age of 15, you may well be able to get further use of any vouchers you have built up. 

Childcare Vouchers are an employee benefit that companies can offer their staff that is tax and National Insurance exempt up to specified limits.

(*and employees who were already receiving Childcare Vouchers before the 6^th April 2011 who have not changed employer). Figures correct as at 6^th January 2024.

To establish which rate of tax you are likely to pay and therefore how much exemption you are entitled to, your employer will perform a ‘basic earnings assessment’.  This will include:

• Basic salary
• Taxable benefits
• Car allowance
• Guaranteed bonuses
• Shift allowances
• Commission

Discretionary and performance related bonuses are not included in this assessment.  Once completed, this assessment will remain valid until the start of the next tax year, regardless of any changes in circumstances throughout the year; therefore your tax and NI exemption will not change throughout the year.

Those who were on the scheme within the same employment before the 6th April 2011 will be entitled to tax and NI exemption on £243 a month regardless of the level of tax they pay until they leave the scheme for longer than 12 months, change employer or no longer qualify.

Childcare Vouchers are usually offered via a salary sacrifice arrangement, although some employers offer them on top of existing salary.

You can continue to receive the vouchers for as long as:

• You have not previously made a successful application for Tax-Free Childcare
• You remain with the same employer
• Your child is still eligible
• You have had at least one wage adjustment and received vouchers within any 12 month period

This depends on your family’s individual circumstances. Download our ‘Parent’s Guide to Childcare Vouchers and Tax-Free Childcare’ for further guidance, or visit the government website www.childcarechoices.gov.uk. Please note that information and figures provided are for general guidance only and we are unable to provide advice on individual circumstances.

The date on which you receive vouchers is set by your employer each time they place an order for you, so you should contact them directly with any queries of this nature.

If you receive the childcare element of working tax credits, which provides specific support related to childcare costs, this will in most cases be affected, as the value of Childcare Vouchers you receive will reduce the value of the qualifying childcare costs you can claim in tax credits.

HMRC have a calculator that you can use to find out the impact of Childcare Vouchers on tax credits: http://www.hmrc.gov.uk/calcs/ccin.htm

This is something you should speak to your employer about.

There is an expiry date printed on paper Childcare Vouchers, this is for internal auditing purposes only. Parents can always use their vouchers beyond this date to pay for approved childcare and Edenred will always honour such vouchers. Electronic Childcare Vouchers do not expire; however, your employer may have additional conditions on usage if you leave their employment.

Your family cannot benefit from Childcare Vouchers and Tax-Free Childcare at the same time, but you can remain on the Childcare Vouchers scheme as long as:

• You have not previously made a successful application for Tax-Free Childcare
• You remain with the same employer
• Your child is still eligible
• You have had at least one wage adjustment and received vouchers within any 12 month period

Edenred Childcare Vouchers do not expire and if you decide to switch to Tax-Free Childcare at a later date, you can still use up any vouchers accrued in your account. However, your employer may have additional conditions on usage if you leave their employment, please check with your HR team.

No. You will not be eligible to stay on the Childcare Vouchers scheme if your partner is on the Tax-Free Childcare scheme.

Edenred Childcare Vouchers do not expire and if you decide to switch to Tax-Free Childcare at a later date, you can still use up any vouchers accrued in your account. However, your employer may have additional conditions on usage if you leave their employment, please check with your HR team.

As long as you remain eligible for the Childcare Vouchers scheme, you can change how much you want to receive in accordance with your employer’s scheme rules. Please note that you will need to have had at least one wage adjustment and receive vouchers within any 12 month period to remain eligible for the scheme in the long term.

When you join the Childcare Vouchers scheme, you are entering into an agreement with your current employer. When you move to a new employer, you are technically ‘leaving’ the scheme. As the Childcare Vouchers scheme closed to new entrants on 4th October 2018 you will not be able to ‘rejoin’ your new employer’s scheme.

However, if you are transferring to a new employer via TUPE, your rights are protected and you will still be eligible to remain on the Childcare Vouchers scheme.

You are still able to receive Childcare Vouchers in conjunction with 30 free hours, despite what the government website is currently advising. This is an error on their behalf. For clarification and to be able to proceed with your application, call HMRC on 0300 123 4097. Alternatively, if the error message appears, confirm you are not receiving Childcare Vouchers to proceed, then return to your account later to correct that you are receiving them.

Childcare Vouchers can be used to pay for the care of children up to the age of 15 or 16 if they are disabled, including:

• Home based care such as childminders, nannies and au pairs
• Pre-school care such as nursery schools, play schools and crèches
• Care for older children such as out of school clubs (breakfast clubs, afterschool clubs including activities, homework clubs and boarding, and holiday clubs)

You can use your Childcare Vouchers to pay more than one carer if you wish. The only condition is that your carer(s) will need to be registered with or approved by the appropriate body.

The current registration and approval bodies include:

• Ofsted Childcare Register – Compulsory (England)
• Ofsted Childcare Register – Voluntary (England)
• Local Health and Social Services Trusts (Northern Ireland)
• Social Care and Social Work Improvement Scotland (SCSWIS) (Scotland)
• Childcare Approval Scheme (Wales)
• The Care and Social Services Inspectorate Wales

It is likely your chosen carer(s) has previously been paid with Edenred Childcare Vouchers and is already affiliated to the network. Simply ask them for their Edenred Account Number which you will need to transfer electronic vouchers to them online. Your carer will then be paid automatically by Edenred each time you make a transfer.

If they have not been paid with Edenred Childcare Vouchers before, they can affiliate online here.

As your Childcare Vouchers are not tied to a particular carer, you simply need to ask your new carer for their Edenred account number, or ask them to affiliate with us if they have not accepted Edenred Childcare Vouchers before. Once you have their Edenred account number you can arrange payment via your online account as you did with any previous carers. If you have a standing order set up to go to your old carer, you should delete it.