Cutting Childcare Vouchers

[bethanbach]

I had an email at work this week to say that the government are cutting the childcare voucher allowance for higher rate tax payers from April. That will be people earning over £35,000. Anyone else heard this? I can't believe the short notice of this, it seems a bit unfair especially to single parents. And also how come this hasn't been in the news??

If you are already in receipt of the allowance, then you should be unaffected. My understanding is that new entrants to the scheme only get the benefit at the lower rate of tax, but existing participants continue at their current level.

Mira is right.

Yes thats right but last month we reduced our vouchers as our daughter started half days at a school nursery with the intention of increasing them again in September when our youngest needs childcare. As I understood we can only change the amount we receive once every financial year so we are going to lose out on £100 a month. If we had known this was going to happen we wouldn't have reduced the amount. Really unfair :(

it was announced in the budget last June, so it is not new news.

Bethanbach We've changed the amount we get several times each year so don't think you are restricted to once a year. You can suspend the vouchers if you need to. As long as you have made a payment in tax year 2011-2012 you can then suspend it for up to 12 months and when you restart you will still be able to claim the higher amount.

Yes, we were told you can suspend the vouchers for up to 12 months, and still qualify for them at the higher rate - so you need to check with your employer, you should still be eligible.

Thanks for the info marrow, I think it differs with the company you work for, I can change mine twice a year but my husband only once a year, will have to look into it. I totally missed that in the budget. Seems like its another blow for middle earners and for women when the bankers are just getting richer again. Its so depressing.

People who are higher rate tax payers will only be able to claim half the normal allowance if they start after April. If they are already have childcare vouchers they are fine. Our Company restrict a change to once a year due to Inland Revenue guidelines unless there is a lifestyle change such as redundancy of partner or death of partner, divorce or child starting school. This is quite normal.