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March 2013: The Government announces changes to childcare vouchers from 2015
As childcare costs continue to rise, the Government has used the 2013 Budget to announce new measures to support working parents. The proposals will make childcare vouchers available to more families and will enable many parents to enjoy higher savings on their childcare costs. However, not all families will be able to benefit from the changes. Here's our guide to the new childcare voucher scheme and a look at the winners and losers:
- A new childcare voucher scheme, due to be launched during or after Autumn 2015, is expected to allow parents to receive Government funding for up to 20% of their childcare costs.
- Current childcare voucher arrangements are to remain in place and open to new members until the new scheme is launched.
- Parents who sign up for the current childcare voucher scheme will be able to remain in it even after the new scheme has launched. However, some current scheme members may choose to switch to the new scheme from 2015, as in some cases this will provide higher savings.
- Under the new arrangements, parents will set up an account with a childcare voucher provider such as KiddiVouchers, and they will pay into this account to purchase childcare vouchers. The Government will top up each parent's childcare voucher account with a 20% contribution towards their childcare costs, up to a maximum contribution of £1,200 a year per child.
- Under both the current scheme and the new scheme, parents are only allowed to use their childcare vouchers to pay for registered childcare.
- The new scheme will initially only be available in respect of children under 5 (and disabled children up to age 16), although there are plans to make it available for all children under 12, probably by 2020.
- The new arrangements will only be available to single parents who work at least 16 hours a week, or to couples who both work at least 16 hours a week.
- The Government has also announced that lower earners will be eligible for up to 85% of their childcare costs to be paid by Universal Credit from April 2016 (compared to up to 70% in the current tax credit system). Parents who receive tax credits or Universal Credit will be ineligible for childcare vouchers.
March 2013: Time for the annual review of earnings assessments
In order for their childcare voucher scheme to remain exempt from tax and National Insurance, employers must review their earnings assessments at the start of each tax year.
Our online facilities show employers which scheme members require an earnings review, while our online calculator helps employers to get it right first time. We also offer online record-keeping facilities, for peace of mind in the event of your scheme being audited by HMRC.
December 2012: HMRC announces increase in tax-exempt childcare voucher allowance for additional-rate taxpayers
From 6th April 2013, additional-rate taxpayers will become subject to a top tax rate of 45%, instead of the current 50%. In order to keep their childcare voucher savings unchanged, HMRC has announced that the tax-exempt allowance for additional-rate taxpayers will increase from £22 a week to £25 a week (or from £97 a month to £110 a month). The announcement can be accessed here.
November 2012: A good day for Pudsey!
Every year KiddiVouchers runs a parent satisfaction survey in aid of BBC Children In Need. We love to hear what parents think of our service, so we pledge to donate £1 to Children In Need for every response.
We've received thousands of responses and a ringing endorsement from parents, with 99% saying they would recommend KiddiVouchers.
So far we've donated £9,750 to Children In Need. Thank you to everyone who made this possible.
October 2012: National Minimum Wage change affects childcare vouchers
The National Minimum Wage has increased from £6.08 an hour to £6.19 an hour with effect from 1st October 2012. Parents who order childcare vouchers through salary sacrifice may be affected by this change, as legislation requires post-sacrifice salary to remain at or above the National Minimum Wage.
The change is most likely to affect low earners and part-time workers, and in some cases will lead to a reduction in the parent's childcare voucher order.
KiddiVouchers offers clients the opportunity to opt in to free National Minimum Wage screening, helping them to comply with legislation. A new calculation has been conducted for all participating scheme members and affected parents have been provided with information about the change.
To find out about our free NMW screening programme or other ways in which we reduce administration for clients, call us free on 0800 612 4395.
August 2012: Preparing for the new school term
The summer holidays have flown by and families across the country are preparing for the new school year.
As part of our ongoing marketing support, we've provided clients with seasonal marketing material to help promote their schemes to parents of school-age children. We're also contacting any parents who opted out of the scheme during the holidays, to remind them to order their childcare vouchers in time for the new school year.
Childcare vouchers can be used for a wide range of care for school-age children, but some parents find they can work around school hours and no longer need childcare once their kids are at school. To avoid parents ordering vouchers which they don't need, and to make sure they are aware of how childcare vouchers can be used for out-of-school care, we are contacting any parents whose children are about to start school.
For more information about our ongoing support for clients and parents, please call us on 0800 612 4395.
May 2012: Campaigning for an increase to childcare support
With childcare costs continuing to make news headlines, KiddiVouchers has joined a campaign to help working parents. To find out about the campaign and to add your name to the Government petition, please click here.
May 2012: It's tax credit season again
It's that time of year when parents are filling in their tax credit renewal forms. Childcare vouchers can affect the amount of tax credits which parents receive, so as an ethical company we take care to ensure parents only sign up for childcare vouchers if the scheme is in their best interest.
All parents are offered free tax credit advice when they register for childcare vouchers and we also send out regular reminders to encourage parents to contact us if their financial circumstances change.
Tax credit renewal forms are not always easy to complete, but it's crucial that parents don't claim tax credits for any childcare which is paid for with childcare vouchers. Parents who fail to declare their childcare vouchers can face a large repayment bill as well as a potential fine.
We email all scheme members during the tax credit renewal season, to help them avoid the pitfalls. If you'd like to know more or if you need help with tax credits, call us free on 0800 612 4395.
January 2012: New VAT guidance for salary sacrifice schemes
Changes to VAT on salary sacrifice schemes came into effect on 1st January 2012. The changes follow a ruling by the European Courts and subsequent guidance issued by HMRC.
HMRC's new guidance suggests that employers who operate a salary sacrifice arrangement are now deemed to be "selling" childcare vouchers to their staff. As childcare is VAT exempt, the VAT on our administration fee will be considered as relating to a VAT exempt sale. This means that some employers will no longer be able to reclaim the VAT on our administration fee. There may also be secondary implications on other parts of their VAT calculations.
HMRC's guidance can be found here.
Our practical guide to VAT on childcare vouchers, along with a discussion document which explores the technicalities, can be found here.
May 2011: BIS publishes guidance on new regulations for agency workers
The Department for Business, Innovation and Skills has published guidance on the proposed changes to agency workers' rights. The new regulations, which take effect from 1st October 2011, can be found here.
Where employers provide childcare vouchers in addition to salary, agency workers will be entitled to receive the same benefits. Where childcare vouchers are provided through salary sacrifice, employers are not required to open their scheme to agency workers.
Some employment agencies already offer childcare voucher schemes, helping to make childcare more affordable for their staff. If you would like to talk to us about setting up a scheme for agency staff, please call us on 0800 612 4395. Our schemes are easy to administer and we can easily cater for temporary workers, variable hours of work and a fast-changing workforce.
February 2011: KiddiVouchers becomes part of the Wider Plan
We're expanding our services to include a wider range of employee benefits, so to reflect this our company name has changed from KiddiVouchers Ltd to Wider Plan Ltd.
We will still be running our childcare voucher schemes under the trading name of KiddiVouchers, but we hope all our clients will enjoy the benefits of being part of the Wider Plan.
For a taste of our new products, click here to visit our Wider Wallet employee discount platform.
December 2010: Finance Bill 2011 confirms proposed changes to childcare vouchers
All working parents can currently receive up to £55 a week (£243 a month) of childcare vouchers, free of tax and National Insurance. However, higher-rate taxpayers who sign up for childcare vouchers after 5th April 2011 will only be eligible to receive up to £28 a week (£124 a month) in childcare vouchers. This proposal has now been formalised in the draft Finance Bill, which can be viewed here.
October 2010: Government announces reduction in tax credits for childcare
The Government has announced further changes to the tax credits system as part of the Comprehensive Spending Review.
At the moment, parents can claim tax credits for up to 80% of eligible childcare costs, but from April 2011 they will only be able to reclaim up to 70% of childcare costs.
The "baby element" of tax credits, worth up to £545 a year for families who have a child under one, is also being withdrawn from April 2011. The Government also plans to increase the rate at which tax credits are withdrawn as household income rises.
These changes are likely to have a significant impact on tax credits for some working families. They also affect the way in which childcare vouchers interact with tax credits, so some parents who are currently better off without childcare vouchers will soon be better off opting into the scheme.
KiddiVouchers provides free guidance to help parents understand how childcare vouchers affect tax credits. To find out more, call us free on 0800 612 4395.
September 2010: Winner of the 2010 Nectar Business Awards
KiddiVouchers continues its winning streak with success in the 2010 Nectar Business Awards.
The judging panel, which included TV "Dragon" James Caan, chose KiddiVouchers as national Small Business of the Year.
Charles Humphreys from Nectar said "KiddiVouchers has continued to grow year on year. This is down to their ability to adapt their business model, enthusiasm and sheer determination to succeed and this is what the Nectar Business Small Business Awards are all about. KiddiVouchers is an inspiration to all those looking to set up and run a highly successful business."
June 2009: KiddiVouchers wins the Government Opportunities Awards
We're delighted that KiddiVouchers has been declared a winner in the Government OpportunitiesNational Excellence in Public Procurement Awards 2009, in recognition of our commitment to offering both quality and value to our clients.
As well as being the only childcare voucher provider to reach the final of the Government Opportunities National Excellence in Public Procurement Awards 2009, KiddiVouchers was declared the Best Small Business supplier to the public sector.
Our award entry was supported by Worcestershire County Council, which appointed KiddiVouchers in December 2008. Our thanks go to the Council for their ongoing support.
Testimonial from Worcestershire County Council
"Competitive rates and efficient administrative processes are key to the success of our partnership with KiddiVouchers. The provision of childcare vouchers was a new venture for Worcestershire County Council and their support and commitment, since January 2008 when the contract commenced, has been invaluable.
Publicity and marketing materials are excellent as well as on-site events to maximise promotion. Feedback from staff is positive and Kiddivouchers have a great team providing advice and information responding promptly and enthusiastically to deliver first class customer care."