[F1318AChildcare: limited exemption for other careU.K.
(1)If conditions A to C are met in relation to the provision for an employee of care for a [F2child—
(a)no liability to income tax arises by virtue of section 62 (general definition of earnings), and
(b)liability to income tax by virtue of Chapter 10 of Part 3 (taxable benefits: residual liability to charge) arises only in respect of so much of the cash equivalent of the benefit as exceeds the exempt amount.]
For the meaning of “care” and “child”, see section 318B.
(2)If those conditions are met only as respects part of the provision, subsection (1) applies in respect of that part.
(3)Condition A is that the child—
(a)is a child or stepchild of the employee and is maintained (wholly or partly) at the employee’s expense, or
(b)is resident with the employee and is a person in respect of whom the employee has parental responsibility.
For the meaning of “parental responsibility”, see section 318B.
(4)Condition B is that the care is qualifying child care.
For the meaning of “qualifying child care”, see section 318C.
(5)Condition C is that the care is provided under a scheme that is open—
(a)to the employer’s employees generally, or
(b)generally to those at a particular location.
(6)For the purposes of this section the “exempt amount”, in any tax year, is [F3£55] for each qualifying week in that year.
(7)A “qualifying week” means a tax week in which care is provided for a child in circumstances in which conditions A to C are met.
A “tax week” means one of the successive periods in a tax year beginning with the first day of that year and every seventh day after that (so that the last day of a tax year or, in the case of a tax year ending in a leap year, the last two days is treated as a separate week).
(8)An employee is only entitled to one exempt amount even if care is provided for more than one child.
But it does not matter that another person may also be entitled to an exempt amount in respect of the same child.
(9)An employee is not entitled to an exempt amount under this section and under section 270A (limited exemption for childcare vouchers) in respect of the same tax week.]
Textual Amendments
F1Ss. 318-318D substituted for s. 318 (with effect in accordance with s. 78(2) of the amending Act) by Finance Act 2004 (c. 12), Sch. 13 para. 1
F2Words in s. 318A(1) substituted (with effect in accordance with s. 16(7) of the amending Act) by Finance Act 2005 (c. 7), s. 16(6)
F3Sum in s. 318A(6) substituted (6.4.2006 with effect for the year 2006-07 and subsequent years of assessment) by The Income Tax (Exempt Amounts for Childcare Vouchers and for Employer Contracted Childcare) Order 2006 (S.I. 2006/882), arts. 1, 2