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25 November 2015

Firstly, an old announcement was discussed again, the entitlement to 30 hours free childcare for three and four year olds.  The policy has been slightly tweaked to extend eligibility and will be effective from September 2017.  Previously, both parents were going to have to be working to qualify (or the one parent if a single parent family) whereas now the policy has been updated to include families where one parent is in work and the other is disabled or a carer or off work on paid sickness or parental leave.

The second childcare development was the revising of the eligibility criteria for the new tax-free childcare scheme.  This scheme was supposed to be being introduced this Autumn but was pushed back and will replace the current childcare vouchers in early 2017.  Now the criteria has been tightened so that the scheme will not be available to those earning over £100,000 and both parents will need to meet a larger minimum income requirement (equivalent to 16 hours at the National Living Wage).

As a reminder, the new scheme allows parents to save up for childcare using a new account where for every £8 saved by the parents is topped up by £2 from HMRC.  This allows parents to save up to £10,000 (£8,000 from the parents and £2,000 from the government) for each child.

Relating to auto-enrolment the news was a delay to the next two scheduled increases to the minimum contribution rates by six months each.  This means that the increase from 2% to 5% is pushed back to April 2018 and the subsequent uplift to 8% won’t be brought in until April 2019.

Finally, the government continued to look to apprenticeships as the way to build a skilled workforce.  As a new measure to fund apprenticeships Osborne announced a new levy to be charged at 0.5% of the gross pay bill of employers.  However, employers will receive an allowance of £15,000 to offset against the levy meaning that only employers with a payroll bill of more than £3m will end up having to pay anything.