As announced in the Finance Bill in December 2010, the government will introduce a restriction on the level of tax relief available to high-rate and additional-rate taxpayers who receive employer-supported childcare.
From April 2011, the weekly amount that parents joining an employer-supported childcare scheme will be able to claim exempt from income tax and disregarded of national insurance (NI) contributions will remain at £55 for basic-rate taxpayers but will be reduced to £28 and £22 per week for higher and additional-rate taxpayers, respectively.
As expected, all current users will be unaffected.
The government will also amend the qualifying condition for availability of employer-supported childcare schemes in respect of employees with earnings at or near the national minimum wage. The amended condition will apply from 6 April.
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