Guide · For HR + finance teams
Running your own workplace nursery benefit vs a broker-run scheme
If you are weighing up how to offer a workplace nursery benefit, you will meet two very different approaches. One has a broker run an arrangement on your behalf. The other has you run your own benefit, with software doing the heavy lifting. The difference matters more than it first looks.
The short version
Halo is a software compliance platform. It lets you run your own workplace nursery benefit, yourself, very simply. Halo is not the benefit, not a broker, and not a third party you hand the whole thing to. That distinction is the heart of this guide, and it is also where the tax exemption lives.
Two ways to offer a workplace nursery benefit
A workplace nursery benefit lets your employees pay their nursery fees from pre-tax salary through Halo Pay, so more of their pay reaches the nursery and less is lost along the way. The benefit itself is the same idea in both models. What changes is who runs it.
The broker-run model
A third party markets an arrangement to employers, then runs most of it for you. You pay a fee; they administer the rest. It can look tidy on day one. The risk is that your business ends up doing little more than buying in places at someone else's nursery, with the real responsibility sitting outside your company.
The run-it-yourself model (with software)
Here, your business offers and runs the benefit. You stay responsible for financing and managing the provision of care, which is exactly what the rules ask for. Software handles the work that used to make this hard: applying the conditions per employee, keeping the records, and producing the evidence on demand. That is what Halo does.
Why HMRC's guidance pushes toward run-it-yourself
The workplace nursery exemption sits in Section 318 ITEPA 2003. One of its conditions is that the employer must be wholly or partly responsible for both financing and managing the provision of the childcare. HMRC's published guidance on commercially marketed nursery arrangements is direct about what that excludes: where an employer does no more than buy in places at a commercially run nursery, without taking on real responsibility, HMRC's view is that the exemption does not apply.
So a thin, hands-off arrangement is not just a softer version of the benefit. It can be the version that does not qualify. Running the benefit yourself, with the responsibility and the evidence genuinely in your business, is the safer ground, and it is the ground the legislation was written for.
Side by side
| Broker-run arrangement | Your own benefit, run on Halo | |
|---|---|---|
| Who runs the benefit | A third party runs the arrangement on your behalf. You pay a fee and they handle the rest. | You run your own workplace nursery benefit. Halo is the software that makes it simple. |
| Your role in the arrangement | Often little more than paying a fixed fee — the employer's involvement can be minimal. | You stay genuinely responsible for financing and managing the provision, with the evidence kept on record for you. |
| Compliance evidence | Frequently a vague “HMRC-compliant” claim with little you can actually show an inspector. | An audit-ready evidence pack on demand: the conditions, applied per employee, per pay period, kept current. |
| Cost to you | Pricing is often opaque, and the value can sit with the promoter rather than your team. | Transparent pricing, quoted before you sign. Cost-neutral to run — our fee never exceeds what you save. |
| Choice of nursery | Sometimes limited to the provider's own or partnered nurseries. | Any Ofsted or Care Inspectorate registered nursery in the UK. Your team keeps the nursery they already chose. |
This is a general characterisation of the two models, not a statement about any single provider. The right setup depends on your circumstances and your own advice.
What “HMRC-compliant” should actually mean
HMRC does not approve or endorse nursery arrangements, so a flat “HMRC-approved” badge is worth very little. What counts is whether you can show, for each employee and each pay period, that the conditions are met and that your business is genuinely running the benefit. That is a records-and-evidence question, and it is the part software is good at.
With Halo, the conditions are applied automatically and the evidence is kept current, so your finance team never has to become a tax team. If you are ever asked to demonstrate compliance, the pack is there.
What this means for your team and your costs
For your employees, the outcome is the same warm one either way: they pay nursery from pre-tax salary, and a typical family keeps more of their pay each month. For your business, running it yourself on Halo is cost-neutral by design, with transparent pricing quoted before you sign and our fee never exceeding what you save.
You also keep the relationship with the nurseries your team already trusts. Halo Pay works with any Ofsted or Care Inspectorate registered nursery in the UK, so nobody has to move their child to make the numbers work.
If you want to look closer
The employer overview walks through how the benefit runs day to day, and the payroll setup guide covers the practical wire-up for HR and finance teams. When you are ready, you can tell us about your company and we will walk you through onboarding, or email hello@halobenefits.co.uk with any question.
This is not tax advice. Whether an arrangement qualifies, and what anyone saves, depends on individual circumstances, employer participation, and nursery costs. Take your own position with your adviser. Halo's structure has been independently reviewed by a leading tax advisory firm.