From 6 April 2005, employers will be able to provide childcare vouchers to the value of £;50 per week without any income tax or Class 1 NICs liabilities. The value of non-cash vouchers for reporting purposes is the cost incurred by the employer in providing them. It must, therefore, include any additional administration charges that the employer must pay to obtain the vouchers.

The Chancellor, in the Pre-Budget Report, announced that such administration charges will be excluded from the employer's costs in determining the reportable value. As a result, employers will be able to use the face value of the vouchers to determine the extent of any tax and NICs charge.

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Source:
www.inlandrevenue.gov.uk/comp/index.htm