Workplace nurseries - Package of funding announced by DES

The Chancellor, in his 2006 Budget Statement, announced that £;8 million in each of the 2006/07 and 2007/08 tax years would be made available for capital grants to help small and medium-sized employers (i.e. those with fewer than 250 employees) set up workplace nurseries.

The Department for Education and Skills (DES) has now given details of this arrangement. A total of £;16.8 million will be made available through the Regional Development Agencies, led by the London Development Agency (LDA). The funds will be allocated in areas where there is most evidence of demand, for example in areas of economic growth and regeneration. Grants will be allocated in 2007, based on detailed proposals from small and medium-sized enterprises (SMEs) in these areas.

The LDA anticipates that the grant could fund the creation of up to 20 new workplace nurseries from scratch or up to 30 through conversion or expansion of existing premises. In some areas, SMEs may wish to work with large employers on expansion of existing workplace nurseries to cater for SME employees. Priority areas for investment will be announced by the end of 2006, together with further information about the allocation process and the arrangements for developing detailed proposals.

Childcare places in workplace nurseries are not a taxable benefit if the statutory conditions are met, among which is the requirement that

1. the childcare is provided on the employer's premises, or
   
   
2. the childcare is not provided on the employer's premises but the employer is responsible, in whole or in part, for the management and financing of the arrangements under which the childcare is provided.

In the first of these situation, where the workplace nursery is set up on the employer's premises, the provision of the childcare can be subcontracted to a specialist childcare provider.

...UK Payroll News - Latest

Further information:
Businesses to be offered funding for workplace nurseries
LDA to lead new fund for the creation of workplace nurseries
Employment Income Manual - workplace nursery provision from 6 April 2005

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