Employee Rewards and Benefits News
New childcare voucher restrictions to come into force
New rules regarding childcare vouchers are coming into force soon, with companies urged to change their direction and plan for the development.
The legislation will apply to employees who begin to use employer-contracted childcare or receive vouchers on or after April 6th 2011, the Payroll Blog asserted, noting that employees who are already receiving such benefits on that date are not affected.
However, they will be if they stopped receiving either of the government benefits and then resume at a later date.
Restrictions are being aimed at employees who pay tax at the 40 per cent rate or the additional 50 per cent rate and it will ensure that higher-paid employees do not receive more from the tax exemption in monetary terms than others who pay tax at the 20 per cent basic rate.
Weekly limits on the tax-exempt provision of childcare vouchers and employer-contracted childcare will be set at £55 for those whose marginal rate of tax is 20 per cent, £28 for 40 per cent and £22 for 50 per cent.
Last year, the government attempted to axe childcare vouchers, only to be faced with massive opposition from many levels of society.
Posted by Elizabeth Mewes
