Childcare vouchers u-turn
by Sarah
Following my previous blog on the decision to cut the tax relief on childcare vouchers, the Prime Minister has announced that he will no longer be making the planned changes following a revolt from labour back benchers. It has not been scrapped totally as the tax relief will remain but only at the basic rate of 20% and not for higher rate tax payers. All those currently in receipt of the benefit will continue to receive it.
According to statistics the current exemptions are worth up to £900 for basic rate tax payers and it is stated that the employer gains £373 although I would have to disagree on the latter since the administration fees the schemes charge pretty much wipe out the benefit for employers.
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