Childcare vouchers update
As has been widely reported, the Government appears to have backed down on proposals made earlier this year to phase out the tax and national insurance exemptions for childcare vouchers.
The Prime Minister has now outlined his plans for childcare vouchers in a letter he sent to two MPs. In his letter the Prime Minister confirmed that all families who currently receive vouchers will continue to get the same support, and that tax relief will be retained for any new childcare vouchers that are issued in the future.
In addition from April 2011 changes will be made to ensure that tax relief is not disproportionally beneficial to higher rate tax payers.
The Government have also scaled down plans to extend free nursery places for all two-year olds whose parents want them. These plans will continue to be rolled out, but at a slower rate than initially announced by the Government.
Further details are expected to be published on the HMRC website shortly.