Recently at Bronco we have introduced a Childcare Voucher Scheme that we run with Busy Bees. This is an addition to the other benefits that we offer staff and allows employees with children, who attend registered childcare providers, to benefit from some assistance toward the cost of childcare. As a parent of 2 boys, who have both been in nurseries, after school clubs and holiday clubs since they were 6 months old I can totally appreciate the big strain the cost of childcare can put on a family. I reckon that I have probably spent close to £100,000 on childcare costs over the last 9 years.
The Busy Bees Childcare Voucher scheme works like many others. Working parents can exchange up to £243 from their gross monthly salary for vouchers that are sent directly to the childcare provider that helps cover your monthly bill. The sum of money allocated for the vouchers (a max of £243) is then exempt from Tax and National Insurance. An employee can save up to £1196 per year on childcare costs, and for the employer once the scheme is set up, the savings made are greater than the cost of the scheme and can save up to £373 per employee each year on the employer NI contributions.
In recent weeks though there has been a bit of concern as Gordon Brown intends to scrap the Childcare Voucher scheme so Busy Bees have set up a petition for people to sign up, to try to get the decision revoked. I kind of feel though that it may be more of an aim by Busy Bees to save their company, as they do run a business based on the voucher scheme, with hundreds of admin people handling new and existing companies. When I looked into the changes planned I felt that it may not be too bad, for us anyway, as our scheme will run happily for another 6 years before anything will really change for us.
The outlines of the changes are this:
After April 2011 (in another couple of years) there will be no tax breaks for any NEW voucher scheme set up – we’re ok as we already have a scheme set up and running
After April 2011 no new employees will be able to join the existing scheme and benefit from it – as yet who knows what staff we will be recruiting in 2011 and whether they will have kids?
After April 2015 (a good 5+ years away) the old schemes will lose the tax breaks for members prior to April 2011 – so our scheme will end in 2015 but as kids grow older they need less childcare too.
So as long as we know that the changes are coming in it can be managed, and for those without a childcare scheme now is the time to get one set up. People are probably forgetting too that it was only in the last few years that the government brought in Child Tax Credits which vastly helps cover the costs of childcare if you are on a lower income, allowing more people to go out to work. No doubt, as with everything the policies and government spending will change as nothing is here forever and will get replaced by other schemes. Who knows in 2015 the government (whoever it will be) might introduce free childcare for all!