In our newsletter on 8 March 2018 we told you about the imminent demise of childcare voucher schemes. These employer-supported schemes were due to close to new entrants on 5 April 2018, but the Government (under pressure from the DUP), has decided to allow these schemes to accept new applicants for another six months to October 2018.

This is good news, as the tax and NIC-free childcare vouchers can be given to parents whose youngest child is aged over 11, and hence don’t qualify for the tax-free childcare account, (which is only open for parents of children aged under 12). For the employer provided childcare voucher scheme a person is described as child until “the last day of the week in which falls 1 September following the child’s 15th birthday, or 16th birthday if the child is disabled” (ITEPA 2003, s 318B(1)).

It is not clear from the Government announcement on 13 March 2018 whether directly contracted childcare schemes (where the employer contracts directly with the nursery), will also benefit from the six-month extension. Employers need to take this time to review what they offer employees in terms of childcare support.

Many families use the child’s grandparents to provide childcare on an informal or formal basis. Although payments can only be made out of the tax-free childcare account to registered childminders, and childcare vouchers should only be used to pay registered child carers (which can include teachers of extra-curriculum subjects).

Where the grandparents are under state pension age, and they care for a child aged under 12, they can claim extra NIC credits. The person providing the care must be a relative of the child and must not also be working and paying NI elsewhere. The child’s parents must be entitled to child benefit for the child (but don’t have to be actually receiving that benefit). This adult childcare NI credit has only been available since 2011 and it is not widely advertised by HMRC.

Written by the Tax Advice Network