Parents saving up to £10,000 in nursery benefits may face unexpected tax bills

HMRC says several commercial schemes are exploiting tax exemption aimed at employers who provide nursery places

Working parents who are saving as much as £10,000 a year on their nursery costs could be hit with unexpected tax bills because of a clampdown on the misuse of a childcare “benefit” offered by some employers.

HM Revenue and Customs has turned its sights on some workplace nursery benefit schemes which allow employees to pay the fees out of their pre-tax salary, resulting in them making big savings on income tax and national insurance.