From April 2011 there will be changes to Employer Supported Childcare (ESC). HMRC have published some questions and answers about how these changes will affect employers and employees.

Employer-supported childcare schemes are voluntary arrangements. The Government supports these initiatives with the tax relief and NICs disregards, but it is up to the employer to decide whether or not to offer childcare support to its employees.

There are no changes to workplace nurseries schemes.

The purpose of the change is to even out the amount of tax saving available for all employees regardless of the tax rate that the individual pays. To identify what rate of tax an individual employee will pay in any one tax year an employer will need to carry out a ‘basic earnings assessment’ for any employee who joins an employer supported childcare scheme on or after 6th April 2011.

Further information is available here http://www.hmrc.gov.uk/thelibrary/esc-qa.htm