Withdrawal of existing tax exemptions
63Restrictions on claiming tax exemption for childcare vouchers
(1)Section 270A of ITEPA 2003 (limited exemption from income tax for qualifying childcare vouchers) is amended as follows.
(2)In subsection (1)—
(a)before “employee” insert “eligible”, and
(b)at the end insert—
“For the meaning of “eligible employee”, see section 270AA.”
(3)In subsection (5)(a), before “employees” insert “eligible”.
(4)After section 270A of ITEPA 2003 insert—
“270AAMeaning of “eligible employee”
(1)An employee is an eligible employee for the purposes of section 270A if conditions A to C are met in relation to the employee.
(2)Condition A is that the employee—
(a)was employed by the employer immediately before the relevant day, and
(b)has not ceased to be employed by the employer on or after that day.
(3)“The relevant day” means the day specified by the Treasury in regulations for the purposes of this section.
(4)Condition B is that there has not been a period of 52 tax weeks ending on or after the relevant day which has not included at least one qualifying week.
(5)In subsection (4)—
“qualifying week” means a tax week in respect of which a qualifying childcare voucher has been provided for the employee under the scheme by the employer in respect of a child, and
“tax week” has the meaning given by section 270A(7).
(6)Condition C is that the employee has not given the employer a childcare account notice.
(7)A “childcare account notice” is a written notice informing the employer that the employee wishes to leave the scheme in order to be able to open a childcare account under section 17 of the Childcare Payments Act 2014 or enable the employee’s partner to do so.
(8)In subsection (7) “partner” is to be read in accordance with regulations made under section 3(5) of that Act.”
(5)In section 717 of ITEPA 2003 (orders and regulations), in subsection (4), after “employments),” insert “section 270AA(3) (exemption from income tax for qualifying childcare vouchers: meaning of “eligible employee”),”.
64Restrictions on claiming tax exemption for employer-contracted childcare
(1)Section 318A of ITEPA 2003 (childcare: limited exemption from income tax for other care) is amended as follows.
(2)In subsection (1)—
(a)before “employee” insert “eligible”, and
(b)after “For” insert “the meaning of “eligible employee”, see section 318AZA, and for”.
(3)In subsection (5)(a), before “employees” insert “eligible”.
(4)After section 318A of ITEPA 2003 insert—
“318AZAMeaning of “eligible employee”
(1)An employee is an eligible employee for the purposes of section 318A if conditions A to C are met in relation to the employee.
(2)Condition A is that the employee—
(a)was employed by the employer immediately before the relevant day, and
(b)has not ceased to be employed by the employer on or after that day.
(3)“The relevant day” means the day specified by the Treasury in regulations for the purposes of this section.
(4)Condition B is that there has not been a period of 52 tax weeks ending on or after the relevant day which has not included at least one qualifying week.
(5)In subsection (4)—
“qualifying week” means a tax week in which care for a child has been provided for the employee under the scheme by the employer in circumstances in which conditions A to D in section 318A are met, and
“tax week” has the meaning given by section 318A(7).
(6)Condition C is that the employee has not given the employer a childcare account notice.
(7)A “childcare account notice” is a written notice informing the employer that the employee wishes to leave the scheme in order to be able to open a childcare account under section 17 of the Childcare Payments Act 2014 or enable the employee’s partner to do so.
(8)In subsection (7) “partner” is to be read in accordance with regulations made under section 3(5) of that Act.
(9)For the meaning of “care” and “child”, see section 318B.”
(5)In section 318B of ITEPA 2003 (childcare: meaning of “care”, “child” etc), in subsection (1), for “318 and 318A” substitute “318 to 318AZA”.
(6)In section 717 of ITEPA 2003 (orders and regulations), in subsection (4), before “section 343(3)” insert “section 318AZA(3) (exemption from income tax for other care: meaning of “eligible employee”),”.