Childcare vouchers – important announcement

The Government has announced an extension to the deadline for joining the Childcare Voucher Scheme for a further six months.  The Scheme was set to close to new entrants at the start of April, but following much debate in the House of Commons, the Government has agreed to allow employees to join until at least October 2018 and take advantage of the savings through Childcare Vouchers.


This is great news, as Childcare Vouchers will continue to be the best way for a significant number of parents to pay for their childcare.




  • The cost of your Childcare Vouchers is deducted from your Gross Pay by salary sacrifice, which means you save income tax and National Insurance on the value of the vouchers.  This can constitute a significant saving. For example, every £100 of vouchers will cost a basic rate tax payer £68 and a higher rate tax payer £58.


  • The maximum you can receive in Childcare Vouchers depends on the rate of income tax you pay:


        o   Basic Rate – £2,916 per year – a saving of £933 per year

        o   Higher Rate – £1,488 per year – a saving of £625 per year

        o   Additional Rate – £1,320 per year – a saving of £620 per year


  • Both parents can be members of Childcare Voucher schemes.  If your partner has access to Childcare Vouchers at work, they can also join their employer’s scheme increasing your total savings.


  •  The Government’s Tax Free Childcare Scheme is still available should you wish to join it, however you are not able to be a member of both Childcare Vouchers and Tax Free Childcare.






The Government has stated that the Childcare Vouchers Scheme will close to new entrants at this point, but we will keep you updated if this changes or when any further announcements are made.