EIM22005 - Benefits: exemptions: “other childcare” supported by the employer: rules from 6 April 2005

Section 318A ITEPA 2003

From 6 April 2005 a new exemption from income tax came into force. The exemption applies to registered childcare or approved home-childcare supported by the employer for the benefit of employees. The exemption is limited to the first £55 a week (£50 per week in year 2005- 06) of childcare costs. There is a matching exemption from Class 1A NICs in the same amount. If the employer meets childcare costs in excess of £55 per week (£50 per week in year 2005-06) then the excess is subject to income tax and NICs

This measure provides a limited exemption to arrangements under which the employer engages with a commercial nursery or approved child carer to provide care for the children of employees.