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Introduction

A number of employers will provide workplace nursery facilities for their employees. The provision of childcare benefits affords some potentially large tax savings as it allows all or part of the childcare costs to be funded by the employer free of income tax and NIC. Broadly speaking, the legislation covers two forms of exemption: childcare provided at the workplace and other childcare.

The various exemptions are found at ITEPA 2003, s 318 onwards.

From 6 April 2017, there were significant changes to the operation of tax efficient childcare with the introduction of the ‘tax-free childcare’ scheme, and the other childcare schemes (the employer-contracted scheme and the childcare vouchers scheme) were closed to new entrants on 4 October 2018, subject to transitional arrangements for those already in the scheme. It is worth noting that the administration of many of the tax efficient schemes will be through public agencies rather than through employers.

Workplace nurseries

Where specific criteria