Recently the Government announced proposals to provide additional financial support for childcare costs for working parents, from 2015. The Government’s proposal is that parents may receive up to £1,200 for each child or 20% of registered childcare per year.
How does this affect the nanny industry and are parents better to stay with their existing Childcare Voucher scheme or move across to the new scheme in 2015? We asked Kirsty Wild from Nannytax.
How does this scheme benefit parents?
The new government proposal will benefit those parents, who:
- are earning less than 150K per annum.
- are self employed – as the current childcare voucher scheme excludes self employed parents.
- have more than 1 child as the tax relief is per child – where as the current scheme is per parent who can claim childcare vouchers from their employer.
- have children under the age of 5.
- both parents work.
Would this be a cost effective option for parents sourcing nannies?
Yes as often Nannies are employed to care for families with 2 or more children as it can prove more cost effective than sending each child to Nursery, therefore as the new scheme is tax relief per child then families with multiple children will benefit. For example under the new scheme a family with 3 children could save £3,600 per year (£1,200 for each child) where as under the existing Childcare Voucher scheme both parents can collectively save £1800 per year.
What does this mean for the nanny industry?
The new scheme will provide financial assistance to an additional 2 million parents which will provide an invaluable boost to the nanny industry (as the financial support will be available to parents using an Ofsted registered provider which includes those nannies on the vOCR – voluntary Ofsted Childcare Register).