EIM21990 - Benefits: exemptions for certain employer supported childcare from 6 April 2005
Section 318A - D ITEPA 2003
Purpose of the legislation
Workplace Nurseries Section 318 provided a narrow
exemption from income tax and NIC where the employer established a
workplace nursery at the business premises and made it available to
the children of employees. Benefits arising from the provision of a
workplace nursery continue to attract unlimited exemption from a
tax charge under the benefits code and NIC if the extended
qualifying conditions are met.
Other childcare Sections 318A – D came into
force on 6 April 2005. The new rules are intended to encourage
employers to choose from a range of childcare options to help
employees with the costs of childcare. However, while the new
measures extend the range of choices, the exemption is limited to
£55 per week (£50 per week in year 2005-06) for both tax
and NICs.
Exemption from income tax Section 16 Finance Act
2005 made employer supported childcare exempt from income tax. This
applies for 2005-06 and subsequent years. Until this change was
introduced the exemption only applied to benefits taxable under the
benefits code. It was possible in certain circumstances for a
charge to arise if the childcare was treated as earnings. FA 2005
removed the possibility of an earnings charge.
Childcare Vouchers Section 270A ITEPA 2003 see
EIM16057 and subsequent pages.
Arrangement of guidance
| EIM21995 | Benefits: exemptions for certain employer supported childcare from 6 April 2005: summary of the new provisions |
| EIM22000 | Benefits: exemptions: workplace nursery provision from 6 April 2005 |
| EIM22005 | Benefits: exemptions: “other childcare” supported by the employer: rules from 6 April 2005 |
| EIM22010 | Benefits: exemptions: childcare and childcare vouchers supported by the employer: rules from 6 April 2005: the exempt amount |
| EIM22015 | Benefits: exemptions: childcare and childcare vouchers: rules from 6 April 2005: conditions: availability to all employees |
| EIM22020 | Benefits: exemptions: childcare and childcare vouchers: rules from 6 April 2005: meaning of “child”, “disabled child” and “patient” |
| EIM22025 | Benefits: exemptions: childcare and childcare vouchers: rules from 6 April 2005: meaning of “parental responsibility” |
| EIM22030 | Benefits: exemptions: childcare and childcare vouchers: rules from 6 April 2005: meaning of “care” and “qualifying childcare” |
