Nursery World - Child tax credits streamlined

Government proposals to reform the Working Families Tax Credit, which includes the childcare tax credit that helps parents on low incomes with childcare costs, were revealed last week. Paymaster General Dawn Primarolo published a Bill to simplify and streamline the current range of tax credits by replacing them with just two new tax credits, in the wake of chancellor Gordon Brown's pre-Budget report earlier in the week.

Paymaster General Dawn Primarolo published a Bill to simplify and streamline the current range of tax credits by replacing them with just two new tax credits, in the wake of chancellor Gordon Brown's pre-Budget report earlier in the week.

The Bill sets out the legislative framework for the Child Tax Credit, for families with children, and the Working Tax Credit for working households on low incomes, including those where a worker has a disability. The credits are to be introduced from 2003.

Support for childcare costs will form part of the Working Tax Credit. Although some respondents to a consultation held over the summer said it should link to the Child Tax Credit instead, most felt this element should retain the link to work, as its purpose was to remove barriers to employment.

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