Question to the HM Treasury:

To ask Mr Chancellor of the Exchequer, what steps the Government is taking to encourage employers as a result of the closure of the Employer Supported Childcare vouchers scheme to engage with and support employees who are parents.

The Government is investing a record amount on childcare support – around £6 billion per annum. It is important that that investment is properly targeted. Tax-Free Childcare targets support at those parents with the highest childcare costs, which is usually those with younger children. We recognise the additional childcare costs for parents of children with disabilities so they can continue to receive Tax-Free Childcare until the child is 17.

Tax-Free Childcare is designed to be fairer and better targeted than childcare vouchers. We estimate that 1.5 million families will be eligible for Tax-Free Childcare, and have childcare costs, whilst there are 600,000 families currently receiving childcare vouchers. This means we estimate that TFC potentially supports 900k more families with the cost of childcare.

We have been gradually rolling out Tax-Free Childcare and over 170,000 parents now have a Tax-Free Childcare account. From 14 February 2017 all eligible parents will be able to apply. Having put in place service improvements we have started marketing activity to encourage more parents to take up the support they are entitled to.

For the number of self-employed parents using Tax-Free Childcare I refer the honourable member to the answer I gave on 29 November 2017 to the honourable member for Batley and Spen (116593). An estimate of the number of applications we expect from self-employed parents is not available.

The introduction of Tax-Free Childcare is an opportunity for all employers to engage with working parents, not just the minority who offer childcare vouchers. HMRC are working with employers so that they understand, and can advise their employees about, the benefits of Tax-Free Childcare.