Clarify tax exemption for workplace nursery benefit, urges ATT

HMRC must clarify the rules around the tax exemption for workplace nursery benefit schemes after some promoters incorrectly promised tax breaks for those buying childcare places says the Association of Taxation Technicians (ATT).

Employers can offer nursery places to their employees as a tax-free benefit in kind using a salary sacrifice scheme as long as particular conditions are met. To qualify businesses must have a nursery on-site or group together with other employers in the area to jointly finance and run a facility. Partnering with a commercial nursery will only qualify for the tax exemption if the employer is ‘wholly or partly responsible for the financing and managing the provision of the care’. Simply buying places at a nursery is unlikely to be exempt from tax.

The ATT has been made aware of some employers being approached by promoters offering places at commercial...