The end of the Childcare Voucher Scheme


The Childcare Voucher (CCV) scheme closed to new applicants on 4th October 2018. It has been replaced by the Tax-Free Childcare scheme, which is Government led and therefore not administered or managed by the employer.

I am an  employer who operates the old scheme, what impact does this change have on my staff and business?

As an employer, you can choose to continue to operate the CCV scheme, but to existing members of the scheme only i.e. those employees who received a voucher before the scheme closed. The 52-week rule which allowed employees to take a break from receiving vouchers means that, in order to be considered an existing member of the scheme, employees must have received a voucher within the 52 weeks prior to the scheme closing. This includes staff on maternity/paternity leave, career breaks etc.

What about new starters?

New starters or those existing staff wishing to join the scheme after the 4th October 2018 must use the new Government Tax-Free Childcare scheme instead, if eligible. The exception to this rule is those whose change of employer has come about as part of a TUPE process.

Families also cannot use both schemes at the same time and employees must inform you in writing within 90 days if they wish to use the Tax-Free Childcare instead of the original CCV Scheme. Employees cannot re-join the scheme if they change their mind about this at a later date.

What can I do?

Of course, as an employer, you can also opt to discontinue the old CCV scheme for your employees. It is best practice to confirm to those affected in writing the Company’s intention to withdraw the scheme, setting a deadline for the end of scheme. There is no obligation on the employer to provide guidance with regards to the Tax-Free scheme, however we would strongly advise you to refer your employees to the Government web pages. Finally, if the scheme is mentioned in any of your current policies, it is imperative to update your policies and procedures to reflect any changes you make.

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