Firm News

Murphy Salisbury advises on changes to childcare vouchers scheme

Stratford-based chartered accountancy firm Murphy Salisbury is reminding businesses about changes to the levels of tax savings available through employer-supported childcare schemes.

The new rules will apply to childcare vouchers provided to the employee by their employer for qualifying childcare as well as arrangements where an employer arranges directly with a registered provider to offer qualifying childcare to employees.

At present, both forms of employer-supported children are exempt from tax and national insurance on the first £55 per week, while higher rate taxpayers benefit from at least double the amount of income tax relief received by basic rate taxpayers.

However, from 6 April 2011, any new entrants to such schemes after this date will receive the same level of tax relief, regardless of their earnings.

Anyone already in a scheme or who joins one before 6 April will continue to enjoy their current rate of tax savings indefinitely, unless they leave the scheme or are no longer eligible to participate.

Bobby Gupta, tax partner at Murphy Salisbury, said: “The good news for higher and additional rate taxpayers is that they can avoid these changes by joining a scheme before 6 April.

“If you are an employer and don’t yet have a scheme in place, then it’s not too late to set one up. We can help businesses in this respect and advise them on how the changes will affect any employees joining the scheme after the cut-off date.”

To find out more about how working with our leading firm of accountants in Stratford-upon-Avon and Warwickshire can help you, please contact us.