The EAT has recently made a decision as to whether it was discriminatory to suspend childcare vouchers during maternity leave which were provided through a salary sacrifice scheme.
The Maternity and Parental Leave Regulations 1999 only suspend “remuneration” during maternity leave. All other benefits are to be continued. There is no dispute – legally – that childcare vouchers are not to be counted as remuneration. This means that, in the normal course of things, childcare vouchers need to be continued during maternity leave.
However, this case was slightly different, in that the employer, Peninsula Business Services Limited paid for the vouchers by way of salary sacrifice. Official HMRC Guidance is that the vouchers need to be paid during maternity leave even where they are part of a salary sacrifice scheme.
The EAT held that the HMRC Guidance was simply wrong. They took a common sense approach, and found that it makes no sense to continue to require a company to provide childcare vouchers by way of salary sacrifice when there is no salary to sacrifice, which is the case during most of maternity leave.
Businesses will now want to ensure that any childcare voucher scheme they operate is done by way of a salary sacrifice scheme.