Tax-free childcare vouchers will be introduced from autumn 2015, and will provide eligible families with 20 per cent of their childcare costs up to £1,200 per child a year – which is equivalent to the basic rate tax relief of childcare costs up to £6,000 a year.
In the first phase, the offer will be open to around 1.3m families, where both parents are working and do not already receive support through tax credits, or Universal Credit, when this is introduced. The scheme will eventually be extended to all children under 12.
While a consultation on the design and operation of the scheme is currently running until October 14, the consultation document is complex and runs to 29 pages.
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