EIM21687 | Particular benefits: childcare
From HM Revenue & Customs · Employment Income Manual
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 |