Employer paying for childcare

[Liland]

My baby is currently in nursery 2 days a week, using tax free childcare. My directors wish to pay directly the nursery for an additional 2 days per week with no change to my salary. Does anyone know the tax implications of this for me? My boss is checking with the accountant, but I wanted to check with you guys for experience. I know 4 full days takes us a little over the tax free childcare cap annually.

Unless it's an on site nursery it will be taxable the same as income would be - so you will pay tax on the value of the benefit. It would be better for you to be able to fully utilise tax free childcare by paying yourself.

The accountant will lookup the rules regarding BIK (Benefit in Kind) and ESC (Employer Supported Childcare).

Depending on the nursery, your employer can make a payment under a workplace nursery scheme. There would be no tax implications for you or them.

So your employer would be paying for half your childcare - how nice

Not sure about tax implications esp if it doesn’t chnage your salary

If he paid them directly can it be considered a gift