From 6th April 2011, there were legislative changes to Employer Supported Childcare that affect employers who operate a childcare voucher scheme and/or directly contracted childcare. There were no changes to the tax exemption and NICs disregard available for workplace nursery schemes.
The purpose of the changes was to even out the amount of income tax savings available to all employees joining schemes on or after 6th April 2011 regardless of the marginal tax rate that the individual pays.
Employer supported childcare schemes are voluntary arrangements. The Government supports these initiatives with the tax exemption and NICs disregards (also referred to as tax relief) that are available, but it is up to the employer to decide whether or not to offer childcare support to its employees.
Further guidance on the changes to Employer Supported Childcare has been published by HMRC in the form of an Employer and Employee Q & A.