From the 6th of April 2005, companies that are sited on small industrial estates or business parks can work together to set up child-care provision, for which the firms can treat as business expenses for tax purposes. Employees' children will then be able to use nursery facilities, without their parents being charged tax or National Insurance. The introduction of the new rule will also enable companies to finance all or part of the costs of childcare arranged by an employee, outside the business premises.
The first £50 of this 'employer-provided' childcare will be exempt from NI and tax, provided that the benefit is not paid as part of the employee's salary.
Our view
Anything that encourages employers to consider using the valuable, yet wasted, resource of Mom's or Dad's who stay at home to look after children rather than work because they cannot find adequate, affordable care for their children is great!