Extended: Childcare Voucher Schemes

The government had previously announced in the 2016 budget that it intended to close childcare vouchers for brand new applicants from April 6 2018, with the new tax-free childcare scheme providing help with childcare costs instead.

The latest announcement means childcare vouchers would remain available to new applicants until October 2018.

In announcing this Damian Hinds, Secretary of State for Education and MP for East Hampshire said: “I have heard the concerns that have been raised about this and the timing, and I can confirm that we will be able to keep the voucher scheme open for a further six months to new entrants.

“Tax-free childcare will mean that more people become eligible, regardless of who their employer is and including for the first time the self-employed.”

The Low Incomes Tax Reform Group (LITRG) has welcomed the government announcement, its chair Anne Fairpo said: “Although tax-free childcare will eventually replace the tax and national insurance relief associated with childcare vouchers, the rules for the tax-free childcare scheme are different.

"While some people will be better off under the tax-free childcare scheme others will benefit more from childcare vouchers. Individuals need to check their own position carefully because whether they qualify for either scheme and how much help they can get depends on a number of factors including hours worked, income, number of children and the amount of childcare costs.

“Unfortunately, it can be difficult for people to work out which childcare scheme is best for them. Alongside childcare vouchers and tax-free childcare, childcare help is also provided through the tax credit and universal credit systems. In some cases, making an application for one scheme can end financial support under another and so people must ensure they check their position carefully before making any applications."