The ATT is calling on HMRC to clarify
the rules around the tax-free provision
of nursery places by an employer to its
employees using a salary sacrifice scheme.
The ATT has been made aware of
employers being approached by promoters
offering places at commercial nurseries,
which obtain tax relief on the cost, and has
urged HMRC to be clear on what schemes
will benefit from the exemption.
In general terms, only places at nurseries that are either on-site or nearby, and which are financed by the employer (or group of employers jointly) qualify for tax exemption. Where a commercial nursery is involved, the employer(s) must be wholly or partly responsible for financing and managing the provision of care.
HMRC’s current guidance in the Employment Income Manual at EIM21971 says that ‘the exemption was not intended to apply, and in the opinion of HMRC does not apply, to commercially marketed schemes… where the employer really does no more than to buy in places at a commercially run nursery.’
The ATT is calling on HMRC to clarify
the rules around the tax-free provision
of nursery places by an employer to its
employees using a salary sacrifice scheme.
The ATT has been made aware of
employers being approached by promoters
offering places at commercial nurseries,
which obtain tax relief on the cost, and has
urged HMRC to be clear on what schemes
will benefit from the exemption.
In general terms, only places at nurseries that are either on-site or nearby, and which are financed by the employer (or group of employers jointly) qualify for tax exemption. Where a commercial nursery is involved, the employer(s) must be wholly or partly responsible for financing and managing the provision of care.
HMRC’s current guidance in the Employment Income Manual at EIM21971 says that ‘the exemption was not intended to apply, and in the opinion of HMRC does not apply, to commercially marketed schemes… where the employer really does no more than to buy in places at a commercially run nursery.’
