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. Rolled out as a salary sacrifice scheme, working parents can exchange part of their salary, currently up to £55 per week, for childcare vouchers which 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 Managing Director, John Woodward. Persuading the government to recognise the significance of the campaign requires 100,000 signatures, which will enable to 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 £1200. Both working parents in a household can join a childcare voucher scheme potentially saving a family more than £2400 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.
John 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.”
