Childcare Payments Bill

Supplementary written evidence submitted by the Chartered Institute of Payroll Professionals (CIPP) (CP 08)


Submitted following Samantha Mann’s appearance before the Childcare Payments Public Bill Committee, Thursday 16 October 2014


Follow up comments Q 154

Mr Heath: If the Treasury looked at this and found a way in which it could be done that was either tax-neutral or advantageous, that would, presumably, tip the balance.

Samantha Mann: Based on the 5% of employers who currently do it, yes, I would say that it is a real expectation that a small number would.


On reflection of Mr Heath’s question and based on my experience with the introduction of Employer Supported Childcare via Childcare Vouchers I believe that employers would only entertain this notion if they could do it as now, as part of a salary sacrifice scheme.


Certainly in my experience of ten years ago, employers were not open to paying over and above salary unless salaries were reduced. If that were to be the case we would have the same position with (tax-free) childcare payments as we have with childcare vouchers and so there would be little gained by the introduction of a new scheme - other than (tax-free) Childcare payments are open to those earning the national minimum wage and the self-employed.


By keeping both options available this would enable full choice for both employee and employer and the self-employed, however I didn’t think that would be a serious notion (due to cost to the exchequer). If that were to be an option I would happily present it to our members to gather views.


I hope that you can add this additional comment to the committee to enable me to provide a more complete answer in response to the question posed by Mr Heath.


22 October 2014

Prepared 24th October 2014