EIM21687 - Particular benefits: childcare

Sections 62 and 318 ITEPA 2003

If an employer provides employees with help with childcare the provision will normally give rise to a tax charge on the employees concerned. Note though that there is a special exemption which applies to certain workplace nurseries (see EIM21900 onwards).

The following tables set out the ways in which childcare assistance might be provided, and the way in which an employment income liability will arise in each case.

All directors and employees whatever their rate of pay

Nature of provision	Section of ITEPA 2003	Relevant instructions
Employers pay a cash allowance to help with childcare expenses	Section 62	EIM05100
Employer pays the fees of a nursery or childminder engaged by the employee	Section 62	EIM00580
Employer reimburses childcare expenses to employee	Section 62	EIM00520 and EIM00590
Employer provides vouchers which employee can use to pay for childcare	Part 3 Chapter 4	EIM16000 to EIM16220

Directors and employees within the benefits code

Nature of provision	Section of ITEPA 2003	Relevant instructions
Employer provides a nursery or childminder to look after employees’ children	Part 3 Chapter 6	EIM21101
Exemption for certain work-place nurseries	Section 318	EIM21900