A growing number of parents are likely to take up the option of childcare vouchers, claims the UK’s largest voucher provider.
Simon Moore, managing director of Computershare Voucher Services (CVS) has predicted more parents will turn to childcare vouchers before rules regarding the scheme are changed in April 2011.
Recently the coalition government announced Child Trust Funds would end in 2011.
”There is no mention of how or if childcare vouchers will be affected,” said Mr Moore. ”I personally believe we’re currently in a strong position. Childcare is high on the government agenda and childcare vouchers remain the most viable way to save money on childcare, particularly in light of the removal of Child Trust Funds and reduced spending on tax credits.”
Currently, it is estimated that 330,000 parents use the childcare vouchers. Both working parents can join a scheme through their employers.
Parents do not pay income tax or National Insurance on the value of the vouchers, which they would pay if they received the same amount in salary.
Vouchers can provide parents who are basic rate tax-payers with a saving of up to £904 per year (subject to individual circumstances), the equivalent of a 31% saving on the first £243 that they spend on childcare costs each month.
”Now is the ideal time to sign up to childcare vouchers,” said Mr Moore, ”as from April 6th 2011 the scheme rules will change. New entrants, regardless of their salary, will receive the same income tax relief as basic rate tax-payers do currently.”
”The change will promote equality of benefits, but existing users will not see a difference in the way their savings are calculated, so during the next year we predict there will be an influx of parents and generous employers to the scheme.”
The childcare vouchers scheme was introduced in 2005.