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Tax Free Childcare Scheme Delayed

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The introduction of the Tax Free Childcare Scheme is to be delayed until 2017 following a ruling in the Supreme Court. The challenge by two of the largest providers of existing Employer sponsored Childcare Vouchers focused on the costs and the implementation of the new scheme. The courts found in favour of the Government’s new scheme but the action has caused a delay in the schemes implementation.


What does this mean to you?


It’s bad news if you have children under 12 years old and are self-employed as there remains no tax incentivised childcare. The new scheme will be open to all working couples in the UK irrespective of being employed or self-employed.


For the employed it gives a longer period to assess the financial implications of the introduction of the new scheme. Many employed workers or directors may find themselves significantly disadvantaged by the new scheme and so have until 2017 to check the position and if necessary introduce a childcare voucher scheme into the workplace. This additional time is particularly good news for expectant parents who would have missed out on childcare vouchers.


Research carried out on over 5,000 working parents found that two-thirds will be worse off under the new scheme, with many families and children ineligible for tax-free childcare.


Most important to note is the new scheme only gives help with childcare up until the child’s 11 birthday whereas the old scheme gives help until the September before the child’s 16th birthday – a major tax incentive to check the figures to see if you will be a loser or winner in the child care stakes.


If you would like to discuss further, then contact us on 01270 250800 or email us at info@alextragroup.co.uk .