The tax treatment of employer-supported childcare is changing from April 2011.
The essential change is that anyone who joins an employer-supported childcare scheme from 6 April 2011 will only get income tax relief at the basic rate.
Qualifying employer-supported childcare is currently tax-free for the first £55 a week, at the employee’s marginal rate of tax (so 50% taxpayers get relief at 50%). The new rules will mean that everyone get tax relief at basic rate, ie approximately £11 a week.
The new rules will only apply to individuals who join a scheme on or after 6 April 2011, and not employees already in schemes at that date.
