Why parents need to apply NOW for childcare vouchers before the April deadline
The deadline to apply for the vouchers is fast-approaching but experts are worried mums and dads don't know about the changes
MUMS and dads are being urged to sign-up NOW if they want to take advantage of the Government's Childcare Vouchers scheme before it's too late.
The salary sacrifice scheme has helped millions of parents to pay for childcare since it was first launched in 2005.
But from April 5, the scheme will be closed to new entrants and replaced with the new Tax-Free Childcare scheme instead.
Tax-free Childcare sees the Government top-up parents' savings by 20 per cent up to £2,000.
But experts are warning that many parents could potentially be left worse-off under the new plan and urged them to take action to see if they are eligible for vouchers before it closes for good.
The Childcare Vouchers Providers Association (CVPA) said many parents are also unaware that it won't be enough just to apply by the deadline - they'll need to have received the vouchers by then too so it might already be too late for some.
CHILDCARE VOUCHERS: WHAT YOU NEED TO KNOW
CHILDCARE Vouchers have been around since 2005. It works via a salary sacrifice system and here's what you need to know.
Vouchers are only available from employers and lets parents pay for their childcare costs out of their pre-tax salary for kids up to the age of 15.
Basic-rate taxpayers can get pay for up to £243 - £55 a week - of childcare with vouchers each month that can be used to pay for a registered childcare provider.
This is also per parent, so if you and your partner are both in work you could get £486 of vouchers each month.
After April 5, parents who aren't signed-up the scheme won't be able to get them, as it will be replaced by the Government's tax-free childcare scheme instead.
If you are already a member you'll be able to continue using your vouchers as long as your employer continues to run the scheme.
If you want to try and get in before the deadline, you should speak to your employer's HR department.
If there's time and you're successful, it will reduce your salary on the next pay day and arrange for the vouchers to be provided to you.
According to the CVPA, a two-parent family earning a combined £70,000 a year and spends £3,796 a year on childcare would receive £1,239 a year under the voucher scheme.
But under the tax-free system, they would get back around £759 a year - a difference of £480.
Jacquie Mills, chairwoman of the CVPA, said: "We remain deeply concerned that the government still insists on closing the Childcare Voucher scheme.
"Many parents, particularly those on average wages that spend close to the national average on childcare will find themselves hundreds of pounds worse off under Tax-free Childcare than they would with Childcare Vouchers.
CHILDCARE VOUCHERS OR TAX-FREE CHILDCARE
IT can be difficult to know what scheme will be right for you and your family as it all depends on your personal circumstances. Here is some advice from MoneySavingExpert on which scheme could work for you.
Childcare Voucher winners:
Couples where one parent doesn't work - Parents aren't eligible for Tax-free Childcare if one parent isn't in work. The one that is can still qualify for vouchers.
Basic-rate taxpayer with childcare costs under £9,336 a year - Under this amount the saving you make with childcare vouchers exceeds the saving you can make with Tax-free Childcare.
Higher-rate taxpayer parents with total annual childcare costs of £6,252 or less. Under this amount, the saving you make with childcare vouchers exceeds the saving you can make with Tax-Free Childcare.
Higher earners - Anyone earning more than £100,00 a year isn't eligible for Tax-Free Childcare, while these high earners can get childcare vouchers.
Tax-free childcare winners:
The self-employed - Those working for themselves are eligible for Tax-Free Childcare but aren't for Childcare Vouchers
Parents with more than one child and high childcare costs - You can receive up to £2,000 per child under the new scheme but with vouchers you'll only get a set amount no matter how many children you have
"The Government has provided very little guidance to employers and parents about the phasing out of the scheme, specifically how the deadline for registration will affect them.
"The lack of effective communication about this deadline means parents are at risk of losing hundreds of pounds worth of childcare support or missing out altogether.
"We are urging the government to keep Childcare Vouchers open alongside Tax-Free childcare beyond April 2018 so that parents can have the time to make an informed choice about the childcare support that best suits their needs."
Tax-free Childcare has been one of the Government's flagship policies to help make the cost of childcare easier for parents.
In October, a report from the TUC found that costs had risen seven times faster than wages since 2008.
More on money
And Admiral Loans found some parents are spending more than half their salary on childcare - with some forking out up to £1,383 a month.
Parents with kids under 12 can apply for the new scheme via the
The Sun Online has contacted HMRC about CVPA's comments.
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