The Inland Revenue has launched a consultation on new tax and NIC incentives to boost the take-up of employer supported childcare schemes. The consultation considers how the tax relief presently in place for workplace nurseries could be extended to cover a variety of other forms of childcare, such as approved home childcare. There are also plans to simplify the existing exemption by removing some of the more onerous conditions.
Many employers will be interested in these developments. The consultation ends on 31 May 2003, and copies of the consultation documents are available from the Inland Revenue website.
There are a number of proposals advanced for comment in the 23 page consultation document:
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Expanding the workplace nurseries tax exemption to include all forms of registered childcare, including approved home childcare;
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Simplifying the requirements for tax exemption, making it easier for employers to qualify by removing the condition for the employer to have management responsibility of the provision;
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Introducing a new tax exemption for childcare vouchers, which are currently only exempt from NIC;
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Introducing a financial limit for the tax and NIC's exemption on all formal childcare provision and childcare vouchers, other than workplace nurseries;
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Ensuring that where schemes are offered, childcare support is available to the whole workforce.
The financial limit proposed is £50 per week. The limit will not apply to the provision of workplace nurseries, just to all of the other forms of extended childcare support provided by the employer.
Links:
The consultation document (pdf) is available at
