Tax-Free Childcare 'To Help 2 Million Families'

A childcare tax break is to be expanded, with working parents set to receive more money for longer than previously planned.

The scheme will be worth up to £2,000 per child per year when it launches in autumn next year – £800 more than the £1,200 originally proposed.

It was only expected to apply to children under the age of seven, but parents will now be entitled to the money until their son or daughter’s 12th birthday.

Nearly two million families could benefit from the scheme – twice as many as the present voucher scheme, which is only available where adopted by an employer.

However, it has been criticised for excluding couples where one parent does not work and for applying to richer households with incomes of up to £300,000.

David Cameron said the policy, which effectively covers 20% of childcare costs up to a maximum of £10,000 a year, would help “hard-pressed families” and “provide financial security for the future”.

Earlier this month , the Family and Childcare Trust said parents now spend more on part-time childcare than their mortgage repayments.

The Prime Minister is due to unveil details of the package during a joint appearance with his deputy Nick Clegg, who added: “We want to ensure everyone can get on and succeed.”

However, Labour’s Lucy Powell, the shadow minister for children, said the proposals were “too little, too late”.

“Mr Cameron has cut support for children and families by £15bn since he came to office,” she said.

“This Government has done nothing in this Parliament to help parents experiencing a cost-of-living crisis.”

As well as the childcare tax break, the Government is to give an extra £50m to nurseries looking after the most deprived three and four-year-olds.

Families claiming Universal Credit will also have 85% of their childcare costs met, up from 70%.

The announcement comes as the Chancellor prepares to unveil this year’s Budget.

George Osborne, who will set out the Government’s spending plans for 2014-15 next Wednesday, has warned of “difficult decisions” to come.

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Tax-Free Childcare 'To Help 2 Million Families'
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