The measure

This measure will relax the requirement for employer supported childcare schemes to be 'available to all employees'. Currently, the employer's supported scheme must be available to all employees in order to attract income tax and National Insurance exemptions. As the schemes often work through a salary sacrifice arrangement, participation could take some low-paid employees below the national minimum wage thresholds.

This measure will relax this requirement, allowing employers to exclude employees at or near the national minimum wage.

Who will be affected?

Employers who offer support for childcare through a childcare voucher scheme or who directly pay for their employees' childcare costs.

When?

This measure will not be included in the 2010 Finance Bill but the Government, if re-elected, intends to legislate for it in 2011. It will have retrospective effect from tax year 2005/06 onwards.