120A Exemption from benefit-in-kind of certain childcare facilities

Summary

This section provides that certain childcare facilities provided by employers to employees on a free or subsidised basis are not to be charged to income tax as a benefit-in-kind. The exemption applies where the childcare service is either provided on premises which are made available solely by the employer, or where the service is provided jointly with other participants (e.g. other employers) on premises made available by one or more participants in a joint scheme. In the latter circumstances the employer must be wholly or partly responsible for both financing and managing the service. Where an employer is not involved in the management of the childcare facility the benefit-in-kind exemption is restricted to cases where the employer provides financial support for items of capital expenditure.

The exemption ceases to have effect for the year of assessment 2011 and subsequent years of assessment.

Details

Definitions

(1) “childcare service” is any form of child minding service or supervised activity to care for children whether or not provided on a regular basis.

“qualifying premises” are premises which are —

• made available solely by the employer, or
• made available by the employer jointly with other participants, or
• made available by other persons and the employer is wholly or partly responsible for financing and managing the childcare service, or
• made available by other persons and the employer is wholly or partially responsible for capital expenditure on the construction or refurbishment of the premises.

The premises must, where appropriate, meet the provisions of the Child Care (Pre-School Services) Regulations, 1996.

Exemption

(2) Exemption from the general benefit-in-kind charging provisions of section 118(1) is granted in respect of any childcare service provided by an employer in a qualifying premises for a child of a director or an employee.

Restriction

(3) Where an employer provides financial support by way of capital expenditure only, then the exemption for the employee is restricted to the amount of such expenditure.

Cesser

(4) The exemption ceases to have effect for the year of assessment 2011 and subsequent years of assessment.

Relevant Date: Finance Act 2021