Recruiting and retaining good staff is critical for business success. With parents representing almost 40% of the UK workforce, family friendly policies and quality and affordable childcare are important to employers and employees alike.
For information on how your business could benefit, look at:
Childcare Means Business: how family friendly policies can help your business prosper!
Recruiting and retaining good staff is critical for business success. With parents representing almost 40% of the UK workforce, quality and affordable childcare is important to employers and employees alike.
There are a number of ways businesses can support the childcare needs of their staff, and those that do also see the benefits including better recruitment and retention, reduced absenteeism and a more motivated workforce.
Information
Providing current and new employees with basic childcare information demonstrates a commitment to family-friendly employment for little or no cost. Details of free, authoritative information can easily be incorporated into intranet sites, notice boards and HR maternity/paternity leave discussions.
Bradford Council’s Children’s Information Link provides free information and advice about childcare provision and nursery education throughout the District. Get in touch with Children's Information Link.
The childcare element of Working Tax Credit is specifically targeted to help families on low incomes to pay for childcare. Eligible families can claim up to 70% of childcare costs (80% from April 2006). Information is available through:
Daycare Trust’s free booklet “Choosing Childcare” is also a useful resource, copies available from:
Flexibility
Offering flexible working options is another way employers can support work-life balance. Although parents don’t have a legal right to work flexibly or reduce their working hours, legislation introduced in April 2003 means that parents do have a right to request flexible working. Employers have a duty to consider the request and must provide a serious business case if they cannot agree it. Further information and advice for both employers and parents is available from the Working Families organisation
Childcare Vouchers and Direct Payment of Childcare Costs
From April 2005, employers have additional flexibility to help staff with their childcare costs. Employers can pay up to £50 a week towards approved childcare for each parent with a child aged up to 15 (16 with special needs). The value of this benefit is exempt from both tax and National Insurance Contributions (NICs). The benefit can be paid either in the form of childcare vouchers or directly to the childcare provider.
Qualifying childcare providers are generally Ofsted registered (or exempt) nurseries, out of school clubs, playschemes and childminders.
Childcare vouchers can be offered in three different ways:
- As a benefit in kind on top of the employee’s existing salary
- As part of a flexible benefits scheme
- As part of a salary sacrifice scheme
Businesses benefit from NIC savings of up to 12.8% on the first £50 of benefit paid each week, as well as tax relief on any additional costs incurred in administering the scheme.
The tax and NIC exemptions applied to childcare vouchers effectively save the employee money on childcare costs. A lower level taxpayer could effectively save over £800 a year on childcare costs, whereas a 40% taxpayer could save over £1,000 a year. Each employed parent can claim the exemptions, so a two-parent family could save over £1,600 (lower tax bracket) or £2,000 (higher tax bracket).
It should be noted that parents in receipt of the childcare component of Working Tax Credit will not generally benefit from a salary sacrifice childcare voucher scheme. For further information on childcare vouchers and direct payment schemes, please refer to the “Helping Employees With Childcare” leaflet.
Employer-sponsored Childcare Places
The UK has the worst childcare record in Europe currently, with the lowest number of childcare places and the highest costs. This leaves many parents relying on informal care from friends or family. Such care can be unreliable, leading to employee lateness and absenteeism.
One solution to this problem is for businesses to sponsor places in a local childcare setting. These can take the form of either permanent, long-term places or back-up places which would offer alternative care when a parent’s usual childcare arrangements have broken down e.g. through sickness or holidays of their carer, or if the setting is closed (such as a school during bad weather) or not available (such as for out-of-hours or weekend working). The benefit of this back-up childcare is free of tax and National Insurance Contributions, providing the cost does not exceed £50 per week across all eligible employees.
Workplace Nurseries and Holiday Play schemes
Employers providing workplace nurseries and holiday care report significant reductions in staff turnover and improved productivity and staff satisfaction. Employees using this provision benefit from paying no tax or NIC either on the value of the service (if provided free-of-charge) or on the proportion of salary used to pay fees.
From April 6 2005, these rules have been extended to cover employees of other companies based on the same site. Tax relief is available for employers operating workplace childcare on running costs and also capital allowances for equipment and premises.
Mobile Crèche
Have you considered offering childcare facilities for staff meetings, conferences, training courses and away days? The Roundabout Mobile Crèche is part of the Bradford Early Year, Childcare & Play and offers childcare in appropriate venues throughout Bradford. Our crèches are suitable for:
- Business meetings
- Community activities
- Conferences
- Courses
- Parental support programmes
- Training days
We can cater for children 0-5 years (0-16 years during school holidays) and provide staff and play resources.
Further sources of information and support
Daycare Trust
Daycare Trust is the national childcare charity, working since 1980 to promote high quality affordable childcare for all. They provide information for parents, childcare providers, employers, trade unions, local authorities and policy makers.
Information booklets are available for purchase. One-day seminars entitled “Employers and Childcare 2005” run regularly.
HM Revenue and Customs
HM Revenue and Customs provide advice on the tax and NIC implications of different forms of support with childcare, including Working Tax Credit.
Got a question or want to comment?
The Business Support Team of Bradford Early Years, Childcare & Play are happy to answer any queries you may have regarding the issue of childcare. Get in touch with the Business Support Team for more information.
