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If you have parents with children eligible for 30 hours free childcare, please note that they can apply for this through the Governments Childcare Choices, but they do not need to join Tax Free Childcare at the same time.  They can continue to stay with care-4 and enjoy the savings through the scheme, alongside the 30 hours free. 

We are disappointed that the government has closed childcare voucher schemes to new entrants from today.  As a result, care-4 has closed to new joiners.
 
care-4, has helped over 200,000 parents for more than 15 years, to save up to £933 a year. Employers have also benefited from using care-4, enabling them to offer their employees a valuable benefit to support their family friendly policies, whist making NIC savings of up to £402 per person per year.
 
Whilst new entrants can no longer join the scheme, we would  like to reassure existing clients and participants using care-4, that they can continue to benefit from the scheme until their youngest child is 15 or they are no longer eligible. 
 
At care-4, we will continue to provide a high level of service to all participants and the good news is that if you are an employer looking to change your current scheme, your existing participants can experience our great service after 4^th October 2018.
 

In March this year, the Government provided an extension to the end date for new joiners to care-4 of 4th October 2018.  You may have seen that they recently updated their website "Help paying for Childcare" with 
the following:
 “You can keep getting vouchers if you’ve joined a scheme and your wages have been adjusted before the scheme closes in October 2018”
 
We requested further clarification from the Government’s tax free childcare team, to ensure that you are aware of the exact payroll requirements for your employees.   They confirmed that to be a participant in the scheme, the parent must have been provided with funds in their care-4 account by midnight on 4th October 2018. 

Employees that have applied for care-4 in their next pay, but have not received the funds into their care-4 account by midnight on 4th October 2018 will not qualify for the tax and national insurance exemptions.

If your October pay is later in the month of October, please ensure that employees are aware that they must have registered ahead of their September payroll cut off, so that payment can be received into care-4 accounts in September pay.

It is vital that employees who want to join the care-4 scheme allow plenty of time ahead of the deadline to do so.  

With the introduction of TFC, the Government had planned to grandfather the employer supported childcare (ESC) schemes like care-4 for all parents that were in the scheme by April 2018.  To reflect the concerns about the timing of the closure of ESC, this date was recently extended for 6 months by Damian Hinds, Education Secretary.
 
The Government has now made the Income Tax (Limited Exemptions for Qualifying Childcare Vouchers and other Childcare) (Relevant Day) Regulations 2018 (SI 2018/462). These regulations set 4^th October 2018 as the date when care-4, as part of ESC, will close to new entrants. 

After this date, parents who are already using care-4 can continue to do so for as long as they remain with you as their employer, do not cease their salary sacrifice for more than 12 months and do not join TFC.
  
Anyone participating in the scheme at that time can continue to save through the scheme until their children are 16.  They can also add further children after this date and use care-4 alongside the 30 hours free childcare offer that the Government provides.

Detailed below are some faqs relating to the 6 month extension.
 
An employee joined TFC in March, as the deadline had passed for care-4.  Can they leave TFC and join care-4?
 
No, any parents who have joined TFC will not be able to join care-4, unless they have also moved to you as a new employer.
 
An employee joined TFC, but prefers the service provided by care-4, can they re-join care-4?
 
If the employee has joined TFC and has formally ceased care-4 and stopped their salary sacrifice within the first 90 days of joining TFC, they will not be able to re-join care-4. 
 
Can an employee join care-4 if their 1st child is due after 4^th October 2018?
 
Employees must be in care-4 and have received a payment by 4th October 2018 to be a participant in the scheme.  If their first child is due after this date, they will not be eligible, however if they are already a parent of an eligible child, they can join and start saving through the scheme.

On 13^th March 2018, Damian Hinds, Education Secretary announced that Employer Supported Childcare schemes, such as our care-4 scheme can be offered to new joiners until 6^th October 2018.

This means that care-4 will no longer be closed to new Clients wishing to offer a childcare voucher scheme to their employees or new parents wishing to join an existing scheme from 5^th April 2018 and any Clients or employees that wish to join can continue to do so until 6^th October 2018.

Anyone participating in the scheme at the end date for new entrants can continue to save through the scheme until their children are 16.  

The Governments childcare choices site www.childcarechoices.gov.uk has been updated to reflect the new end date for new joiners to childcare vouchers and also sets out the other options available to working parents, including Tax Free Childcare and 30 hours free.  This site includes a calculator to work out which scheme provides the best savings for each employee.  

Please note that employees will be unable to join care-4 if they are already participating in Tax Free Childcare.

The Chancellor delivered his Autumn Statement on 22nd November outlining the Government's spending commitments. 

Tax Free Childcare
There was no further information about roll out plans for Tax Free Childcare, however, a few days earlier, the Tax Free Childcare team advised that the scheme would be extended to parents with children up to age 6 from 24th November 2017. The Government currently plan to extend to parents with children up to age 12 by 31st March 2018.

The Office for Budget Responsibility provided actual take up of TFC in their accompanying budget documentation.  Take up is currently much less than expected at 30,000.

The average family spend on childcare reported by the Government is currently £3,276 per year.  This provides savings of £655 per year with Tax Free Childcare and £933 as a basic rate tax payer on care-4.  

Employees can register for care-4 today and continue to join care-4 until April 2018.  Provided that they have funds taken from their pay and paid into their care-4 account by end of March. employees can continue to receive tax and NI savings as a care-4 participant through the grandfathered scheme until their children are no longer eligible.

National Minimum Wage/National Living Wage
The Chancellor announced that the NLW will rise from £7.50 to £7.83 per hour from April 2018.  In addition, the NMW rates will increase for 21 to 24 year olds from £7.05 to £7.38 per hour.

Personal Allowance
The Personal Allowance will increase to £11,850 from April 2018, with the higher rate threshold increasing to £46,350.

Here is some further clarification on the Tax Free Childcare (TFC) scheme, its launch and the impact on employees that are using care-4 which you may find useful: 

Timing of roll-out to age 4 and over

There is still a plan to roll out to parents with children up to age 12 by the end of the year, but as yet we’ve seen no further detail on when it will extend past the current eligibility of up to age 4. As soon as we know more, we’ll share the information with you.

Reconfirmation of TFC eligibility

If you register for TFC, parents must re-confirm eligibility every 90 days to continue to receive the government subsidy. 

care-4 participants, must request a cessation through their care-4 account or if you use a flex scheme they will need to cease through that to ensure they have reported this cessation to you.  This request must take place through payroll, and the salary sacrifice must have stopped within the 90-day period. 

If employees join TFC and during the 90-day period decide that they don’t want to leave care-4, they can stop TFC and continue with care-4, as long as they haven’t already requested a cessation through care-4 or you.

Maternity leave

care-4 participants who go on maternity leave after April 2018 can stop salary sacrifice for up to 12 months and still remain in the care-4 scheme and save on childcare costs, as long as they or their partner do not join TFC.  

If they join TFC and go on maternity leave, they will continue to be eligible for TFC regardless of whether their leave is paid or unpaid. Parents cannot hold a childcare account for the child that they are on maternity leave for until they return to work. 

If the parent opts to phase a return to work, they will not be able to reconfirm their eligibility and save with TFC until their salary reaches over £120 per week.

You may be aware that the government planned to introduce their TFC scheme on 28th April.  However, they have now published a news story confirming the launch of TFC, a week earlier than planned. 

This launch date may have been brought forward due to purdah commencing before their original launch date, following the Prime Minister’s announcement of a general election on 8th June.  We believe that the government are not able to promote TFC during purdah through its planned communications, however it may be used as part of election campaigning.

There has also been a change to the government’s planned roll out to parents, with an announcement that parents with children aged 4 or younger are able to apply for TFC first.  The full roll out is planned before the end of the year and we will advise you of further timings as soon as they are known. 

Alongside this announcement, the government has published operational guidance on the 30-hours childcare entitlement available from September.  This guidance includes information on how parents will register for TFC.

Childcare Choices

As mentioned, previously, the Childcare Choices website provides a calculator for parents to compare the childcare offers available and check whether they will be better off with care-4 childcare vouchers, TFC or another government provided scheme.
  
If parents have already accessed this site and pre-registered for email alerts, it is likely that they will receive an alert shortly if they are a parent of a child aged under 4 at 31st August 2017. 

Please note

Parents registering for TFC will be required to leave employer supported childcare

Households must choose the scheme that is best for them and cannot participate in both schemes at the same time.

Parents will be required to re-confirm their eligibility every 90 days and must have left care-4 before the next eligibility period. 

Where parents are eligible for TFC and then one parent’s salary increases to £100,000 or more during the year, will need to confirm their ineligibility for TFC in the next 90 day period.

The government have now confirmed that parents who leave employer supported childcare schemes such as care-4 to join TFC, will not be able to leave TFC and re-join care-4 regardless of whether this happens before April 2018.