Tax-Free Childcare is part of the government’s long-term plan to support working families.
The government today (Wednesday 1 July) welcomed a judgment from the Supreme Court that found the government’s proposals for delivering Tax-Free Childcare to be clearly lawful.
It also confirmed that, as a direct result of the legal challenge, the scheme is now expected to launch from early 2017. The existing Employer-Supported Childcare scheme will remain open to new entrants until Tax-Free Childcare is launched.
As a result of the legal action, the court placed a suspension on the development of the scheme which prevented key delivery steps from taking place. This legal action was brought by a small group of childcare voucher providers involved in the delivery of the scheme that Tax-Free Childcare will eventually replace.
Exchequer Secretary to the Treasury, Damian Hinds said:
*We are pleased that the government’s proposals for delivering Tax-Free Childcare have been found to be clearly lawful. This government is absolutely clear on the importance of supporting families with their childcare costs.
*It is disappointing that some organisations involved in the existing scheme felt the need to take and persist in this costly and wasteful course of action, which has led to a delay in the launch of Tax-Free Childcare.
*We are now pressing ahead with the scheme as part of our ongoing commitment to support working families.
Tax-Free Childcare is part of the government’s long-term plan to support working families and will provide up to 1.8 million families across the UK with up to £2,000 of childcare support per year, per child, via a new simple online system.
The government is clear on the importance of supporting families with their childcare costs. Spending on childcare was increased by £1 billion in the last Parliament and the government has also committed to doubling free childcare for working parents of three and four year olds to 30 hours a week.
*a legal challenge was brought against the government’s decision to deliver the Tax-Free Childcare accounts through HMRC working in partnership with NS&I
*some organisations involved in the existing Employer-Supported Childcare scheme decided to pursue challenges against the government’s decision to deliver Tax-Free Childcare childcare accounts by HMRC and NS&I working in partnership, and NS&I’s use of an existing outsourcing contract to deliver childcare accounts
*the Supreme Court “unanimously dismisses their appeal”
*formal arrangements have now been made between HMRC and NS&I and they are pressing ahead to deliver Tax-Free Childcare as soon as possible
*exact rollout details for Tax-Free Childcare will be confirmed in due course
*Employer-Supported Childcare, often referred to as childcare vouchers, will remain open to new entrants until Tax-Free Childcare launches. Parents who wish to remain in Employer-Supported Childcare once Tax-Free Childcare is launched will be able to, while their current employer continues to offer the voucher scheme
*workplace nurseries will be unaffected by the introduction of Tax-Free Childcare