Araft of new measures that will significantly extend access to tax breaks for employer-supported childcare across the UK has been proposed by the Treasury.
At present, employees do not pay tax on the benefit of a place in a nursery provided by an employer, as long as the provision satisfies strict criteria. If the nursery is not on the employer's own premises, the employer must be wholly or partly responsible for both the financing and management of the nursery. This tax break has been relatively limited in its scope.
A more popular form of support is employer-provided childcare vouchers, which can be used for any form of childcare. These are exempt from both employers' and employees' national insurance contributions (NICs), but employees are taxed on them.
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