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HMRC internal manual

Employment Income Manual

Benefits: exemption for employer supported childcare: summary of changes introduced with effect from 6 April 2005

Section 318 and 318A - D ITEPA 2003

This chart compares chargeable and exempt childcare provision before and after 5 April 2005.

  ### To 5 April 2005 ### From 6 April 2005    
         
  Tax NICs Tax NICs
### Workplace nurseries Exempt Exempt Exempt Exempt
### Childcare vouchers Chargeable Exempt    
  First £55 a week exempt (£50 for the tax year 2005/06) then tax chargeable First £55 a week exempt (£50 for the tax year 2005/06) then liable for Class 1 NICs      
  ### Other childcare Chargeable Exempt First £55 a week exempt (£50 for the tax year 2005/06) then tax chargeable First £55 a week exempt (£50 for the tax year 2005/06) then liable for Class 1A NICs

From 6 April 2005, in addition to the new tax exemptions for childcare vouchers and other childcare, new conditions came into force that relate to all employer-provided childcare support. These were:

Availability to all staff

All employees should be able to apply for the childcare being offered by the employer.

The age of the child

A child qualifies up to 1s t September following their 15t h birthday or 1s t September following their 16t h birthday if they are disabled.

Registered or approved childcare only

The childcare must be registered or approved.