Apple Childcare Vouchers, a local company based in Alderley Edge, Cheshire, is lobbying to save Childcare Vouchers.
Childcare Vouchers are one of the most popular benefits that an employer can provide. They enable employees to save up to £1,196 per year by sacrificing part of their salary in exchange for childcare vouchers which are tax and NI free.
On Tuesday 29th September 2009, at the Labour Party Conference Gordon Brown announced his plans to scrap the popular ‘childcare vouchers’ and replace them with 10 hours per week of free childcare for 2 year olds of deprived families.
Marcus Barrow, Managing Director of Apple Childcare Vouchers says “I don’t understand the logic in the Government taking away such a fantastic benefit. The proposal is to provide free childcare places for two year olds, whereas parents can use childcare vouchers to pay for childcare up to the age of 16. I would consider this a step backwards, not forwards.”
The exact details of Gordon Brown’s announcement are still unclear but it has been stated that companies can continue to offer childcare vouchers however the tax and NI breaks will apply only to employees who join a scheme before April 2011. Employees in a scheme by April 2011 will get the tax relief until April 2015 after which it will be completely withdrawn for all employees. The company can still continue to provide a scheme to their employees after this date but without any tax benefits.
Marcus Barrow adds, “The message that we are trying to emphasise to companies is to start a scheme now so as not to miss out. There is still a minimum of just less than six years left for employees to save tax and NI on childcare fees. That’s a potential saving of £6,575 for each employee over the five and half year period.”
This could have an impact on all employees who currently receive childcare vouchers as a benefit. Stewart Pickering, Director of Apple Childcare Vouchers and founder of kidsunlimited states, “With childcare costs high, employees already struggle to pay the rising costs. Taking away such a benefit could make childcare unaffordable and result in employees leaving the workplace. In the current economic climate where more and more families need the second income this could be disastrous”.
The Conservative Party were quick to react to Gordon Brown’s plans with shadow families minister, Maria Miller, suggesting a Conservative government will not reduce the tax benefits on childcare vouchers. Speaking at the Conservative Party Conference on 7th October, Miller said "It is hard sustaining family life. The prime minister is axing the support that 300,000 parents receive through employer supported childcare vouchers, most of these parents affected are basic rate tax payers working in areas such as the health care sector, doing vital jobs relying on this support that they’ve received”.
The other key benefit of the childcare voucher scheme is that employers also save through the employers NI. Companies currently save up to £373 per year, per employee that is on the scheme. By removing this benefit companies will also lose out.
Apple Childcare Vouchers have joined many of the childcare voucher providers, employee benefit companies, employers and parents in lobbying and protesting against the proposed plan. If you would like to add your support you can join an online petition at http://petitions.number10.gov.uk/keepvouchers/
For more information about childcare vouchers please visit www.applechildcarevouchers.co.uk or phone 0845 602 9459.
