My work colleague's wife is a nursery manager, and as part of her contract receives free childcare for her three year old. She has been asked to complete a form P11D, and her employer has valued her benefit at £7,000. Is this taxable, and how would you determine the value? Her staff get 25% discount.  Is this taxable too?

Look at HMRC’s Employment Income manual at www.hmrc.gov.uk/manuals/eimanual/EIM22001.htm, that free childcare offered by the employer is tax-free. However, there are a number of conditions that must be fulfilled, and they can be seen on subsequent pages, EIM22002 to EIM22007. It is worth noting that on page EIM22005 it states: ‘Condition D. In order for the exemption in respect of the provision for an employee of care for a child to apply, the scheme under which care is provided must be open to the scheme employer’s employees generally. The condition is intended to encourage employers to provide childcare for all employees. If the scheme is only available to a particular group of employees - for example, directors or senior managers - this condition will not be met and the value of the benefit will remain liable to income tax and NICs.“