Small businesses 'could pull out of childcare vouchers scheme', warns British Chambers of Commerce

The BCC said that there is confusion among employers about whether they are liable to pay for childcare vouchers on behalf of employees during unpaid maternity leave, after a ruling in Europe last year resulted in changes to the rules on contractual benefits.
Employees whose babies were born on or after 5 October 2008 are now entitled to receive contractual benefits throughout their entire period of maternity leave whether they are being paid or not.
This means the employer should make monthly payments for childcare vouchers, which the employee would normally make herself through salary sacrifice, until she returns to work.
But there is uncertainty among employers about whether vouchers should be treated as remuneration or a contractual benefit.
Policy adviser at the BCC, Abigail Morris, warned that if employers are liable, it could put off smaller businesses from offering vouchers.
She said, 'We're very supportive of flexible working, but it's unfair for an employer to pay for the employee portion of childcare vouchers. It would be easy for the Government to compensate employers.'
The Daycare Trust said it has received a number of calls about the ruling.
A spokesperson said, 'It's clear there is confusion about the regulations and we urge the Government to clarify the situation. It's important that there is no scaremongering. There is no evidence that employers are abandoning childcare vouchers en masse.’
The Department for Business, Enterprise and Regulatory Reform said it expected to publish guidance over the summer.
A spokesman said, ‘We believe that providing contractual benefits via salary sacrifice can have real benefits for businesses.'