Government tax exemption scrap will hit childcare vouchers

Company childcare vouchers could be getting the boot according to research by the Institute of Payroll Professionals (IPP).

The UK’s membership body for payroll professionals carried out a survey amongst its members to find out their opinion on the government’s intention to scrap tax exemption on childcare vouchers from April 2011.

Four out of five IPP members believe their employers are likely to scrap the childcare voucher scheme and 78 per cent of members are against the withdrawl of tax relieve on vouchers.

Associate Director of Policy, Research and Strategic Visibility of the IPP, Karen Thomson 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