There are many changes on the horizon concerning childcare, including:
- Childcare allowance being increased from 15 to 30 hours a week;
- Salary sacrifice Childcare Vouchers (CCVs) are due to be abolished;
- Tax credits are being revised; and
- Tax-Free Childcare (TFC) is due to be introduced.
CCVs and TFC
Employers may see lower productivity and higher absenteeism as employees may be affected by worries about the change in expensive childcare.
The changeover from CCVs to TFC means that salary sacrifice arrangements with the employer will cease and that the employee will be in control of the new system and will need to update their eligibility information every three months.
If you are an employer you may think that you will have less hassle in the long term and yes, you will. However, you have a duty of care to your staff to ensure that they understand the difference between the two schemes.
Tax credits will be limited to the first two children for families claiming after April 2017 and will affect families planning a third child.
You may find that when these changes come into place, that your employees may make requests for flexible working to accommodate how they manage childcare.