From 4 October 2018, childcare voucher schemes aren't available to new applicants.
If you have any employees who want to apply for childcare vouchers, they must apply before 4 October 2018. If they apply after this date, they may be able to get tax-free childcare instead.
If an employee applies for tax-free childcare, they can get up to £500 every three months for each of their children to help with the costs of childcare and the government will pay this through an online account. If someone is currently receiving childcare vouchers they can stay in the voucher scheme if they joined before 4 October and:
- They stay with the employer who continues to run the scheme.
- They don't take an unpaid career break for more than a year.
If they stay in the scheme, you can just continue to process this through your payroll as normal.
If they decide to apply for tax-free childcare instead and are successful in the application, they must tell you within 90 days and you then need to stop paying the new vouchers. Once they've told you they're getting tax-free childcare, they can't rejoin the voucher scheme.
To stop the childcare vouchers:
- Sage 50 Payroll - There are two ways in which you can stop the payment. You can change the values in Enter Payments for that deduction to zero. Alternatively, open the employee's record then click the Employment tab then Pay Elements and on either the Deductions or Salary Sacrifice tabs, depending on how you originally set the voucher up, change the childcare vouchers In Use column to No.
- Sage Instant Payroll - Change the value of the childcare vouchers to zero in Maintain Employee's Pay.
To find out more about the changes to childcare vouchers and tax-free childcare, please visit HMRC's website.