In preparation for the Budget on March 23rd, we are publishing a series of posts from our Accountancy team, detailing the changes that will come into effect from April.
If you operate, or benefit from, a company Child Tax Voucher scheme there are some significant changes headed your way come April 6th. What was once a blanket scheme is becoming a tiered, income-dependant system with different rates of relief for different earners.
Crucially, the changes will only affect people who sign up to the scheme after April 6th, so if you register to start receiving vouchers before that date, you can still get the blanket rate – this is especially important for high earners, as they are seeing the biggest deduction in benefits.
Currently all employees – regardless of earnings – receive Child Tax Vouchers worth £55 per week. As of April 6th, this rate will only apply to those paying basic rate income tax (and those already on the scheme). If you pay Higher Rate income tax your voucher allowance will fall to £28 per week, and if you pay Additional Rate income tax your allowance will be just £22 per week.
What this means is that the time to join your workplace Child Tax Voucher scheme – if you haven’t already – is now.