The Childcare Levy
This is not a another corporate tax, but a solution for companies to attract, recruit and retain staff. Women want to go back to work but in most of the cases, childcare is more expensive than their potential salary.
The Childcare Levy was initially conceived to be similar to the existing Apprenticeship Levy, whereby companies put monies into a Government account, which then receives Government 'top-ups'.
However with Brexit all over the place and until such time that the Government is ready to implement policy change, companies can help employees with childcare costs in two ways.
Firstly, by offering employees a taxable allowance for an amount equivalent to the gross salary of the nanny, creche or nursery. Many people don’t know this, but they can ask their employers to pay the nanny or nursery directly, on their behalf. That payment is a taxable allowance with no P11 liability attached to it.
Secondly, companies can also help with childcare costs by offering an accrual account by which part of the employee’s salary is put into a separate account until such time that the employee has their first child, at which point the employee could start withdrawing funds from the account to cover childcare costs. Monies would not be transferable from company to company. The accrual account would have to be built within the employee’s contract and returned to the employee when leaving the company.