Parents who are higher-rate tax payers need to act now to avoid losing the financial benefits of their childcare vouchers.
The Government is introducing changes to the tax exemption relating to childcare vouchers from 6 April. From this date, higher-rate and additional rate tax payers will be subject to a reduced maximum to make their savings more equitable with standard-rate tax payers.
Currently, all parents who are signed up to a childcare voucher scheme are able to claim up to £55 of tax-exempt income for each qualifying week, which can equal a saving of £1,195 over a year, depending on individual circumstances. Where two working parents sign up to the scheme, double savings can be made.
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