4 December 2009
The Childcare Voucher industry today welcomed the Government’s decision not to phase out tax relief on the benefit across the board, saying the move would benefit parents, businesses and childcare providers.
An announcement today confirmed that the Government has dropped the proposal, which was made by Prime Minister Gordon Brown at this year’s Labour party conference, prompting widespread protest among parents. More than 92,000 signed a petition on the Downing Street website.
The current vouchers system provides parents with the equivalent of a 31 per cent saving on the first £243 that they spend on childcare costs, or 41 per cent for higher rate ones.
The Government today indicated that it intends to allow tax relief to remain for everyone on all basic rate tax, only removing the ability to claim on higher rate tax. This means that all working parents will have the same access to Childcare Vouchers, regardless of their tax status.
Hannah Andrews, a policewoman and mother of one said: “This is great news and an immense relief. Like thousands of other parents I was very concerned about how losing these vouchers would affect my childcare arrangements and ability to work.
“I’m so happy the Government has seen sense and listened to the concerns of hardworking parents everywhere.”
Simon Moore, Managing Director of Computershare Voucher Services (CVS) said: “CVS welcomes this move by the Government and we would like to thank them for making a decision that will benefit parents, businesses and childcare providers.
“The response we have had to the threat to cut this vital benefit reflects how valuable they are to hard working families in every corner of Britain.
“Our research revealed that the plans as proposed would have left 57 per cent of parents unable to maintain their existing childcare arrangements and forced to reconsider their decision to work.
“This is a great day for working parents; I would like to applaud the Prime Minister for listening and thank everyone who has supported us in our campaign”