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Changes to tax and childcare benefits

Mar 20, 2017

Employers may need to reconsider their benefit offerings, as tax savings through some salary sacrifice schemes will be abolished from 6 April 2017. While the clampdown will limit the extent to which staff benefit from tax and national insurance, schemes related to pension savings (including pensions advice), childcare, cycle-to-work and ultra-low emission cars will not be affected.

The government has also set up a new tax-free childcare scheme to help working parents whose individual earnings are less than £100,000 per year. Parents will now be eligible to receive 20% (to a maximum of £2000 per child or £4000 if a child is disabled) of their annual childcare cost. This is expected to be in force from 2017, though it will be rolled out to families with the youngest children first.

Changes to tax and childcare benefits