The Government tops up the account to a maximum of £2,000 per child on an investment of £8,000 by the parents (giving the equivalent of 20% tax relief).
The new scheme involves parents making payments into a designated account. Existing employer supported childcare schemes will be closed to new entrants. Ī new system of childcare funding, called ‘tax-free childcare, is being introduced. There a special rules on employer supported childcare – see. You can find a list of the expenses on the HMRC website at. Specific conditions apply so care is needed. These include provisions of bicycles, parking, and nursery provision for example. Some reimbursed expenses are not taxable under special rules. Where a specific agreement existed between HMRC and the employer this was called a dispensation. Up to 5 April 2016, many employers reimbursed work related expenses at rates agreed with HM Revenue and Customs to produce no tax liability. The new system gives a tax exemption for expenses which would be tax-deductible under normal rules. Reimbursed expenses, general rules and special casesĭifferent rules apply from 6 April 2016. Tax would therefore be payable on the reimbursement. It would not have been necessarily incurred by any holder of the office of sales manager. HMRC would not consider that the expense was allowable. The employer reimburses her for the cost of the babysitter. She pays a babysitter to look after her children. She is asked to attend a special sales event in the evening. When an expense is reimbursed, HMRC has to be satisfied that the expense is allowable for tax purposes, otherwise the reimbursement from your employer is treated as additional taxable income.Įxample: Alison is a sales manager. Other work expenses – particularly travel and accommodation expenses – are reimbursed by your employer.įrom April 2016, the system is being simplified, and HMRC will usually accept that business expenses which are reimbursed by your employer are not taxable benefits for you. Most of the expenses you incur at work as an employee are paid for by your employer.
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