EIM16057 - Vouchers and credit cards: childcare vouchers: exemption from 6 April 2005

Section 270A ITEPA 2003

For the definition of childcare voucher see EIM16055.For childcare vouchers provided by the employer, if certain conditions are met then from 6 April 2005, the first £55 per week (£50 per week in year 2005-06) of the childcare voucher is exempt. The three conditions are

• Condition 1: child

The child must be either

A child or stepchild of the employee and is maintained (wholly or partly) at the employee’s expense or

Resident with the employee and is a person in respect of whom the employee has parental responsibility.

• Condition 2: qualifying childcare

The childcare provided must be qualifying childcare.

• Condition 3: availability

The childcare vouchers must be available to either

All the employees or

To all of the employees at that particular location.

For an explanation of: -

Child see EIM22020

Parental responsibility see EIM22025

Qualifying childcare see EIM22030

The maximum of the childcare voucher that can be exempt is £55 for each qualifying week (£50 per week in year 2005-06). A qualifying week is a tax week in which a qualifying childcare voucher is received. The definition of tax week is to be found at EIM22010.

An employee is only entitled to one exempt amount per week even if they have two or more children receiving childcare. However, if two employees have responsibility for the same child each employee can receive a weekly exempt amount.

If exemption is claimed by an employee for childcare vouchers then that employee cannot claim exemption under the childcare provisions.