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Childcare tax relief postponed

Coalition plans to introduce childcare tax breaks have been pushed back

11 Jan 2013 Accountancy Age

By Calum Fuller

David Cameron at the World Economic Forum annual meeting in Davos 2010

PLANS to give tax breaks to all parents of young children are to be postponed, scaled back, and become more targeted, it has emerged.

The coalition has been forced to push back the announcement, which would have seen tax relief of about £2,000 per child, amid disagreements between senior ministers over detail and the funding of the scheme, reports the Telegraph.

The breaks, which were due to be announced on Monday, were thought to be the leading policy to come out of the coalition's mid-term review, but following a meeting between senior ministers David Cameron (pictured), Nick Clegg, George Osborne and Danny Alexander, the move has been postponed.

Instead, it is expected a reform of the state pension is to be announced next week, with discussions continuing on how to fund the reliefs, while Nick Clegg suggested that scheme may not be universal after all.

He said: "Basically, what we are working on is to fill the gaps – firstly to identify those families who, in the future, will be on universal credit but will not get enough from universal credit to cover their child care costs to give them an incentive to work.

"This is all about giving mothers and fathers the incentives to go to work and helping with their child care costs to help them go to work."

He added: "This is explicitly and self-consciously targeted at working families who do not receive universal credits."

The measure would replace the current £700m voucher and allowances scheme, and could be in force before the next general election.

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