Operate a childcare voucher scheme

Key points

  • Following the phasing in of the new Tax-Free Childcare scheme from April 2017, from 4 October 2018 no new entrants are able to join a childcare voucher scheme. However, employees already in an existing childcare voucher scheme before this date can continue to benefit from it, provided that they remain employees of the employer, and the employer continues to offer the scheme.
  • Childcare vouchers enable limited tax and national insurance savings to be made by the employer and employee provided that certain conditions are met.
  • Employers need to decide whether they will produce and administer vouchers in-house or use the services of a voucher company to do this.
  • Vouchers can be offered as part of a salary-sacrifice arrangement or a flexible benefits scheme.

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