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HMRC internal manual

National Insurance Manual

From
HM Revenue & Customs
Updated
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Class 1A National Insurance contributions: Special Class 1A NICs cases: Child care benefits from 6 April 2005: Exemption from Class 1A NICs liability on childcare benefits other than non-cash vouchers

Childcare benefits other than non-cash vouchersFrom 6 April 2005 the special Class 1A exemption for childcare benefits was withdrawn. For more information about the period before 6 April 2005 see

NIM16102.

From 6 April 2005 liability for Class 1A NICs on childcare benefits is assessed based on the general principles described at NIM13002. Accordingly, liability for Class 1A NICs on provided childcare benefits are aligned with the tax rules introduced from this date. For more information on the tax rules see EIM21902.

Liability for Class 1A depends on whether the childcare benefits are general earnings chargeable to income tax under ITEPA 2003.

Where childcare benefits are exempt from tax the benefit is also exempt from Class 1A NICs.

Where childcare benefits are general earnings chargeable to income tax under ITEPA 2003, Class 1A NICs will be due providing all the conditions described in NIM13021 are satisfied.

Some employees may be in more than one separate employment and receive childcare benefits from each employment. Where these circumstances occur, the exemption for Class 1A NICs purposes is applied in each employment.