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Childcare exemption and salary sacrifice

Childcare exemption and salary sacrifice

An employer wishes to provide other childcare (but possibly vouchers instead) to one employee only; the sole manager within the firm. This would seem not to satisfy Condition C in s 318A ITEPA 2003, meaning that the provision would not be exempt.

Is it possible to structure this wish by means of a "personalised" salary sacrifice arrangement, involving that one employee only? The employer is hoping that the conditions in s 318A can be "by-passed" by this method, but that the general exemption can be retained.

Would the answer be different if the manager was a prospective employee and the arrangement was part of the negotiated remuneration package?


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By neileg
15th Jun 2010 16:32


Salary sacrifices have to be 'generally available'. While there's a debate to be had around what this means in practice, a one emplyee scheme jst doesn't seem to fit!

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15th Jun 2010 18:07

Why only one employee?

If the benefit of employer-provided childcare is linked to salary sacrifice, the employer actually saves some Er's NIC when an employee avails themselves of this arrangement.  It would be in the employer's interest to offer this flexible benefit to all employees and the benefit would then be tax-free.

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By Bluffer
21st Jun 2010 20:22

Thanks for the replies

Many thanks for the replies to this question.

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