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HMRC internal manual

Employment Income Manual

Benefits: exemption for workplace nurseries: joint provision with other employers: further conditions to 5 April 2005

Section 318(3) (4) and (7) ITEPA 2003

For the exemption for “workplace” nurseries to apply (see EIM21900) there is an alternative to the “employer’s premises” test (see EIM21915). The purpose of the alternative is to allow small employers, who might not be in a position to afford or manage a nursery on their own premises, to club together with other employers to finance and manage a childcare facility. Childcare provided under such a joint facility qualifies for exemption if:

  • the three bullet points at EIM21915 are satisfied and
  • the care is provided under arrangements made by persons who include the employer and
  • the care is provided on premises made available by one or more of those persons (who may or may not include the employer) and
  • the employer is wholly or partly responsible for financing and managing the provision of the care.

The premises can be made available in any of the ways mentioned at EIM21915.

See EIM21930 for the meaning of responsibility for management and EIM21925 for the meaning of responsibility for financing.

Remember that before 6 April 2005 the exemption does not apply at all if the care is taxable as earnings within Section 62 ITEPA 2003, for example because the childcare has been paid for out of the employee’s earnings or the childcare represents an application of the employee’s earnings.