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HMRC internal manual

Employment Income Manual

HM Revenue & Customs
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Benefits: exemptions: other childcare and childcare vouchers: availability to all employees: relevant low-paid employees

Section 318A(5) ITEPA 2003 and section 36 FA 2011

Relevant low-paid employees

Condition C may be regarded as met if the scheme that the employer has in place for providing childcare vouchers does not allow relevant low-paid employees to take part because it involves either

  • relevant salary sacrifice arrangements, or
  • relevant flexible remuneration arrangements.

Both relevant salary sacrifice arrangements and relevant flexible remuneration arrangements involve the employee agreeing to a reduced amount of salary or wages in return for the employer providing childcare vouchers.

Relevant low-paid employees are those for who their salary or wages are at a rate that cannot be reduced by the full amount required for participation in a salary sacrifice or flexible remuneration arrangement because the resulting salary or wage would be likely to fall below the national minimum wage.