PAYROLLERS DON'T THINK COMPANIES WILL OFFER CHILDCARE VOUCHERS AFTER REMOVAL OF TAX BREAKS, SAYS IPP
10 November 2009
Four in five payroll professionals do not think organisations will continue running childcare voucher schemes after tax exemptions are abolished, according to research by the Institute of Payroll Professionals (IPP).
The UK’s leading membership body for payroll professionals carried out a survey amongst its members asking their opinions on the government’s intention to scrap tax exemptions on childcare vouchers from April 2011.
Unsurprisingly, 78 per cent of IPP members also said they are against the withdrawal of tax relief on childcare vouchers. There is a worry that removing tax exemptions will encourage some mothers to stay at home and not go back to work after having children.
The findings support the IPP’s stance that employers may no longer see the financial value of retaining a childcare voucher scheme if they do not benefit from tax breaks since administration costs are usually paid for by savings on National Insurance.
Karen Thomson, Associate Director of Policy, Research and Strategic Visibility of the IPP, said: “We asked our membership to voice their opinions over the elimination of tax relief on childcare vouchers and we received an overwhelming response confirming our belief that this plan would influence a company’s decision on whether to maintain the scheme.
“The reality is that many organisations will not see the advantage in offering the scheme as it will just incur costs to operate and be a further burden to the payroll department.
“In response to these survey results, the IPP Policy & Research team will be writing to the Treasury on behalf of our membership and will publish the outcome shortly.”
If you want to sign a petition that urges the government not to scrap tax exemptions on the childcare voucher scheme, visit: http://petitions.number10.gov.uk/keepvouchers/.