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Childcare-voucher provider plans campaign to support working parents


Childcare-voucher provider Busy Bees Benefits is launching a campaign to encourage the Government to look at increasing support for this employee benefit.

Childcare vouchers are available to any employed parent, providing their employer is willing to opt in to the scheme. Parents typically receive childcare vouchers instead of part of their salary, which leads to tax and National Insurance savings of up to £933 a year.

Unlike childcare tax credits, childcare vouchers are carefully controlled, which ensures that they can only be spent on regulated childcare (including nurseries, pre-schools, child-minders, nannies and out-of-school care).

And unlike the free nursery places scheme, which provides part-time early education for three- and four-year-olds, childcare vouchers don't have a negative impact on the earning potential of childcare providers.

In the context of these financial pressures, employee benefits company Busy Bees Benefits has launched a national campaign to help working parents save more on the cost of childcare. Offering employee benefits such as Childcare Vouchers can save money for both businesses and working parents. Employee benefits help to motivate staff, improve retention and attract experienced and skilled employees.

The 'Mind the Gap – Raise the Cap' campaign aims to persuade the government to raise the current weekly childcare voucher allowance of £55 to £75. The main aim of the campaign is to bridge the gap between the rising cost of childcare and the amount parents can exchange for childcare vouchers, which has not changed since 2006.

Childcare vouchers are a popular employee benefit as they are non-taxable, National Insurance-exempt and they help working parents save money on the cost of childcare. They are rolled out as a salary sacrifice scheme. Working parents can exchange part of their salary, currently up to £55 per week, for childcare vouchers that can be used to pay for any registered childcare for children up to the age of 16. Tax and National Insurance is then calculated on the remaining salary after childcare vouchers are deducted.

Currently working parents can save up to £933 per year on the cost of their childcare and employers can save up to £402.36 per scheme user per year on National Insurance contributions.

At the centre of the campaign is an e-petition set up by Busy Bees group MD John Woodward. Persuading the government to recognise the significance of the campaign requires 100,000 signatures, which will enable the campaign to be eligible for debate in the House of Commons. The aim is to achieve a policy change in the 2013 budget.

If the campaign is a success, working parents will be able to save over £300 more per year, increasing the annual savings to over £1,200. Both working parents in a household can join a childcare voucher scheme, potentially saving a family more than £2,400 per year on their childcare costs. Businesses offering a childcare voucher scheme will be able to save almost £550 on National Insurance contributions per scheme user, per year, for basic rate taxpayers.

Woodward said: "The cap allowance was set by the Government at £55 per week and this has not changed since 2006. As the UK's largest provider of childcare, serving more than 15,000 children, we understand the pressures on working parents. We feel the Government should do much more for working parents to help with childcare costs; however, we must be realistic. We want the campaign to receive the attention it deserves from the Government and for it to achieve its aim. Therefore, we think that £75 is an achievable target, which will make a real difference to working parents."

Alison Chalmers, director at KiddiVouchers, says: "Childcare vouchers provide a powerful economic stimulus, by encouraging parents to return to work, by helping to fund high quality early education and by assisting employers who are striving to be family-friendly. Childcare vouchers are more accurately targeted than other types of support for working parents and the scheme fits well with the Government's 'austerity plus growth' agenda."