Financial Resolution No. 24 relates to section 120A of the Taxes Consolidation Act 1997 which provides for an exemption from benefit-in-kind charge for employer-provided child care. The capital cost of the provision of certain free or subsidised child care facilities by employers is exempt from benefit-in-kind charge on the employees that avail of such facilities. This relief was introduced in 1999 to encourage employers to invest in child care facilities and thus increase the overall supply of child care places. At the time of its introduction there was a scarcity of child care places and the costs associated with child care were increasing. The provisions were amended in 2001 to permit a number of smaller employers to come together in the provision of child care facilities. However, the Revenue Commissioners have indicated that in practice only larger employers avail of the relief. The Commission on Taxation in its report recommended the abolition of this exemption citing equity due to the likelihood that only large employers have the ability to make the necessary investments. It is now proposed that this provision be abolished with effect from 1 January 2011. The cost to the employer of providing such a benefit in kind for each individual employee will now be assessed as part of the employee's emoluments for the year and the appropriate taxpayer levies will be collected through the PAYE system. The estimated yield to the Exchequer will be €3 million in 2011 and €6 million in a full year.

See this item in context