asked the Chancellor of the Exchequer whether the Inland Revenue intends to recover tax for back years from those in receipt of the benefit of an employer subsidised nursery place.
In law, the benefit of an employer subsidised nursery place has been taxable on directors and those employees currently earning at a rate of £8,500 a year since the legislation was first enacted in 1948. This is in common with most other benefits in kind. Although the Board of Inland Revenue cannot take responsibility for the content of the wide variety of published material on taxation matters, it is conscious that the mistaken advice given in the Equal Opportunities Commission manual and the Which? Tax Saving Guide may have misled many employees whose children attended such nurseries. The board recognises that such employees may have suffered uncertainty and anxiety because of this mistaken advice. In these exceptional circumstances and because of the hardship that might result if the tax due for back years was collected, the board has decided that it would not be appropriate to seek to recover tax for periods before 6 April 1985. This decision will be given the usual publicity and a copy of an Inland Revenue press release announcing its terms will be placed in the Library.