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Helping employees with childcare costs

HMRC has recently issued a guide for employers setting out the three different ways employers can support childcare costs on a tax exempt basis.  The amount that can be exempt depends on the type of support provided.

  • If you operate a childcare voucher scheme or provide directly contracted childcare, for those employees who join/have joined your scheme after 6 April 2011 you will have to carry out an assessment of the employee’s earnings to work out the exempt amount.
  • Places allocated in workplace nurseries are potentially exempt from tax and NICs.This exemption also covers another employer’s staff who work on your premises and use your childcare facility
  • There is a limited exemption for contracting directly with a commercial nursery or childminder to provide childcare.There is also a limited exemption if you provide childcare vouchers.If your employee joined your scheme on or before 5 April 2011 the first £55 per week will be exempt from tax and NICs.

 

 

Date: 15th August, 2014
Author: Cathy Corns

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