(8) In this section “the Tribunal” means—

(a) the First-tier Tribunal, or

(b) in Northern Ireland, the appeal tribunal (within the meaning of section
59(3)).

61 5Cases where there is more than one eligible person

(1) This section applies in the following cases.

(2) The first case is where—

(a) two or more persons (“the applicants”) have applied to open a childcare
account in respect of the same child, and

(b) 10any of the applicants is appealing against a decision not to allow the
applicant to open a childcare account in respect of the child.

(3) The second case is where—

(a) one or more persons (“the applicants”) have applied to open a childcare
account in respect of a child,

(b) 15another person (“the existing account-holder”) holds a childcare
account in respect of the child, and

(c) any of the applicants is appealing against a decision not to allow the
applicant to open a childcare account in respect of the child.

(4) The third case is where—

(a) 20a person is appealing against a decision not to make an account
restriction order in relation to another person, or

(b) a person is appealing against a decision to make an account restriction
order in relation to the person so as to enable another person to open a
childcare account or make a declaration of eligibility in relation to such
25an account.

(5) In this section “the affected parties” means—

(a) in the case described in subsection (2), the applicants;

(b) in the case described in subsection (3), the applicants and the existing
account-holder;

(c) 30in the case described in subsection (4), each of the persons mentioned
in paragraph (a) or (b) of that subsection (as the case may be).

(6) Notice of the appeal must be given to each of the affected parties (other than
the person bringing the appeal).

(7) Each of the affected parties is to be treated as a party to the appeal.

(8) 35If the Tribunal quashes the whole or part of the decision, it must substitute its
own decision for that of HMRC.

(9) A decision of the Tribunal made by virtue of this section has the same effect as,
and may be enforced in the same manner as, a decision of HMRC.

(10) In this section “the Tribunal” has the same meaning as in section 60.

Compensatory payments

62 Compensatory payments

(1) Where a person has in circumstances specified in regulations been deprived of
the opportunity to receive top-up payments in respect of a child for a period,
5HMRC must pay the person an amount equal to 20% of the costs incurred on
qualifying childcare in respect of the child during the period.

(2) But the amount paid to a person by HMRC under this section for a period may
not exceed a maximum amount specified in, or determined in accordance with,
regulations.

(3) 10The circumstances that may be specified in regulations under this section
include, in particular—

(a) where an appealable decision is varied or cancelled on a review under
section 57, and

(b) where an appealable decision is quashed (whether wholly or partly)
15under section 60.

(4) Payments may be made to a person under this section regardless of whether
the person—

(a) has opened a childcare account, or

(b) has made a valid declaration of eligibility.

(5) 20Regulations may make further provision about making payments under this
section.

(6) Regulations may substitute a different percentage for the percentage for the
time being specified in subsection (1).

Withdrawal of existing tax exemptions

63 25Restrictions 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) 30at 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—

“270AA Meaning of “eligible employee”

(1) 35An 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) 5Condition 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
  10qualifying 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
15childcare 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) 20In 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”),”.

64 25Restrictions 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) 30after “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—

“318AZA Meaning of “eligible employee”

(1) 35An 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) 40has 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)—

• 5“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) 10Condition 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
152014 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
20subsection (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”),”.

General

65 25Functions of Commissioners for Revenue and Customs

The matters dealt with by and under this Act are to be under the management
of the Commissioners for Her Majesty’s Revenue and Customs.

66 Tax treatment of top-up payments

A top-up payment made into a childcare account is not to be regarded as
30income of the account-holder for the purposes of the Income Tax Acts.

67 Set-off against tax liabilities etc

The following payments are not to be regarded as a credit for the purposes of
section 130 of the Finance Act 2008 (set-off)—

(a) top-up payments;

(b) 35payments under section 62 (compensatory payments);

(c) where the Commissioners provide childcare accounts, any funds held
in a childcare account.

68 Northern Ireland

In Schedule 2 to the Northern Ireland Act 1998 (excepted matters), after

paragraph 10B insert—

“10C The operation of the Childcare Payments Act 2014.”

Final provisions

69 Regulations: general

(1) 5Any power to make regulations under this Act is exercisable by statutory
instrument.

(2) Any power to make regulations under the following provisions of this Act is
exercisable by the Treasury—

(a) section 1(5) (power to amend rate of top-up payment);

(b) 10section 2(3)(b) to (d) (qualifying childcare);

(c) sections 3, 7 to 11 and 13 (eligibility);

(d) section 5(2) (power to alter length of entitlement period);

(e) section 14 (qualifying child);

(f) section 19(7) (power to amend the relevant maximum);

(g) 15section 30 (termination of tax credit awards);

(h) section 31 (power to provide for automatic termination of universal
credit);

(i) sections 32 and 33 (disqualification of tax credit or universal credit
claimants from obtaining top-up payments);

(j) 20sections 43(5), 44(6) and 46(5) (powers to vary certain penalties);

(k) section 50(4) (power to alter period for which directions under section
50 have effect);

(l) section 62(6) (power to amend rate of compensatory payments);

(m) section 72 (power to make consequential amendments);

(n) 25section 75 (commencement).

(3) Any power to make regulations under a provision of this Act that is not
mentioned in subsection (2) is exercisable by the Commissioners for Her
Majesty’s Revenue and Customs.

(4) Regulations under this Act may—

(a) 30make different provision for different purposes or in relation to
different areas,

(b) contain incidental, supplemental, consequential or transitional
provision or savings, and

(c) provide for a person to exercise a discretion in dealing with any matter.

(5) 35Subsection (4) does not apply to regulations under section 75 (see instead
subsection (3) of that section).

70 Regulations: Parliamentary control

(1) A statutory instrument containing regulations under this Act is subject to
annulment in pursuance of a resolution of either House of Parliament, unless
40the instrument—

(a) is required by subsection (3) or any other enactment to be laid in draft
before, and approved by a resolution of, each House, or

(b) contains only regulations under section 75.

(2) Subsection (3) applies to a statutory instrument that contains (with or without
other provisions)—

(a) regulations under section 1(5);

(b) regulations under section 2(3)(b), (c) or (d);

(c) 5the first regulations under each of sections 3 and 7 to 10;

(d) regulations under section 5(2);

(e) the first regulations under section 14;

(f) regulations under section 19(7) which substitute a lower amount for
any amount for the time being specified in section 19(5);

(g) 10regulations under section 31;

(h) the first regulations under each of sections 32(5) and 33(5);

(i) regulations under section 32(6) or 33(6);

(j) regulations under section 43(5), 44(6) or 46(5);

(k) regulations under section 50(4);

(l) 15regulations under section 62(6);

(m) regulations under section 72.

(3) A statutory instrument to which this subsection applies may not be made
unless a draft of the instrument has been laid before, and approved by a
resolution of, each House of Parliament.

71 20Interpretation

(1) In this Act—

• “account-holder” has the meaning given by section 15(10);

• “account provider” has the meaning given by section 15(10);

• “appealable decision” has the meaning given by section 56(3);

• 25“childcare” has the meaning given by section 2(1);

• “childcare account” has the meaning given by section 15;

• “the Commissioners” means the Commissioners for Her Majesty’s
  Revenue and Customs;

• “declaration of eligibility” has the meaning given by section 4;

• 30“enactment” includes—

  (a)

  an enactment contained in subordinate legislation,

  (b)

  an enactment contained in, or in an instrument made under, an
  Act of the Scottish Parliament,

  (c)

  an enactment contained in, or in an instrument made under, a
  35Measure or Act of the National Assembly for Wales, and

  (d)

  an enactment contained in, or in an instrument made under,
  Northern Ireland legislation;

• “entitlement period” means a period determined in accordance with
  section 5;

• 40“HMRC” means Her Majesty’s Revenue and Customs;

• “ITEPA 2003” means the Income Tax (Earnings and Pensions) Act 2003;

• “partner” is to be read in accordance with regulations made under section
  3(5);

• “permitted payment” has the meaning given by section 20(3);

• 45“prohibited payment” has the meaning given by section 20(4);

• “qualifying child” has the meaning given by section 14;

• “qualifying childcare” has the meaning given by section 2(2);

Childcare Payments BillPage 46

• “qualifying payment” has the meaning given by section 19;

• “tax credit” has the same meaning as in the Tax Credits Act 2002;

• “top-up element”, in relation to an amount, has the meaning given by
  section 21;

• 5“top-up payment” is to be read in accordance with section 1;

• “universal credit” means universal credit payable under—

  (a)

  Part 1 of the Welfare Reform Act 2012, or

  (b)

  any provision made for Northern Ireland which corresponds to
  that Part of that Act.

(2) 10In this Act—

(a) references to a valid declaration of eligibility are to be read in
accordance with section 4(2), and

(b) references to an active childcare account are to be read in accordance
with section 17(3).

72 15Power to make consequential amendments

(1) Regulations may make such provision amending, repealing, revoking or
applying with modifications any enactment to which this section applies as the
Treasury consider necessary or expedient in consequence of any provision
made by or under this Act.

(2) 20This section applies to—

(a) any enactment passed or made before the passing of this Act, and

(b) any enactment passed or made on or before the last day of the Session
in which this Act is passed.

73 Financial provisions

(1) 25There is to be paid out of money provided by Parliament any increase
attributable to this Act in the sums payable under any other Act out of money
so provided.

(2) Subsections (3) and (4) apply if childcare accounts are provided by the
Commissioners or the Director of Savings (“the relevant account provider”).

(3) 30Sums paid into childcare accounts are not to be paid into the Consolidated
Fund.

(4) Sums payable from childcare accounts are not to be regarded as expenditure of
the relevant account provider.

74 Extent

(1) 35Except as provided by subsection (2), this Act extends to England and Wales,
Scotland and Northern Ireland.

(2) Any amendment or repeal made by this Act has the same extent as the
provision amended or repealed.

75 Commencement and short title

(1) 40The following provisions of this Act come into force on the day on which this
Act is passed—

(a) sections 65 and 68;

(b) sections 69 to 72, 73(1), 74 and this section;

(c) any power to make regulations under this Act.

(2) The remaining provisions of this Act come into force in accordance with
5provision contained in regulations.

(3) Regulations under subsection (2) may—

(a) make different provision for different purposes or in relation to
different areas;

(b) make such transitory or transitional provision, or savings, as the
10Treasury consider necessary or expedient, including (in particular)
such adaptations of provisions of this Act brought into force as appear
to be necessary or expedient in consequence of other provisions of this
Act not yet having come into force.

(4) This Act may be cited as the Childcare Payments Act 2014.