Hello, we are considering setting up a salary sacrifice scheme for a workplace nursery. We already have an onsite nursery (non subsidised), but it looks like our employees could benefit from Tax and NI savings on all their nursery fees (rather than being restricted to childcare voucher limits or what they can get through the new govt tax free childcare scheme). Does anyone else have experience of setting up such a scheme and would be willing to share your experience/learning?
Hi Tanya, I've not done any salary sacrifice for a while so I am no longer sure how effective this would be for NIC purposes. Essentially, the process is:
- get tax advice on the proposed structure;
- draft an agreement whereby the employee agrees to reduce their gross pay for the cost of the service;
- get the draft agreement reviewed by the tax advisors and/or lawyers;
- launch.
It's not dificult but needs care to be taken to ensure it is fully robust. You may also need to inform the Inland Revenue of your plan - your advisor will know.
Good luck,
Rachel