When the tax changes came into force earlier this year, all those already receiving childcare vouchers could continue to claim the maximum voucher value available - £55 per week. They have ‘protected rights’ and can still claim up to £55 per week whilst they remain in the same scheme.
Those who’ve signed up since that date are classed as new scheme entrants by HMT and are only entitled to claim up to £55 per week if they are a basic rate tax payer. Higher rate tax payers joining a scheme now can only claim up to £28 per week (or up to £22 if they’re an additional rate tax payer).
However, if you’re a higher rate payer who was a member before the tax changes but you subsequently change your job – whether your new employer uses the same provider or not – you’ll lose your ‘protected rights’ and be classed as a new scheme entrant. Therefore, you’ll only be entitled to claim £28 or £22 per week, depending on your tax bracket*.
Your savings won’t be affected if your company switches providers. In this instance, you’ll still retain your ‘protected rights’ which means although you’re asked to join again with the new provider, you’re entitled to the same savings as before because you’re still a member of your current employer’s scheme with ‘protected rights’.
Childcare vouchers remain one of the most viable ways to save money on ever escalating childcare costs. If you’d like more information on the savings you could make visit our website.
*Basic rate tax payers will not be affected.