Children don't have to be taxing

Opinion

Children don't have to be taxing

Employers that offer their staff childcare vouchers through HMRCs Employer Supported Childcare scheme may want to encourage those that haven't signed up to do so before the end of March 2011. This is because HMRC are changing the rules for those that sign up from April 2011. 

At present, staff that are paying higher rate tax, and using the scheme, get tax relief at the higher rate. From April 2011, the tax treatment will be the same for all new joiners irrespective of the tax rate levied. Staff that have joined the scheme before April next year will still benefit from the old regime, unless they leave the scheme or change employer.

What many fail to realise is that childcare vouchers can be used for children aged under 16 for activities such as pre-school, summer camps and boarding school.

This was first published in December 2010

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