Childcare tax break cut could increase IVA needs

UK parents could find themselves struggling financially as a result of government plans to abolish the tax break on childcare vouchers.

The cuts are set to be imposed in order to fund the placement of 250,000 two-year-olds into childcare.

The move has been criticised by Parentsoutloud.com, which suggests that the move will only put hard working parents under increased pressure.

Losing the tax relief on childcare vouchers could prove to be one bill too far for some families struggling to cope in the recession and adoption of bankruptcy-avoidance methods such as individual voluntary agreements (IVAs) could increase.

Speaking of the policy change, Margaret Morrissey of Parentsoutloud.com said that parents would most likely fund themselves spending more, despite working really hard to survive the downturn.

She commented: "It is probably going to cost all parents more. In total, 450,000 parents who currently take part in the voucher scheme will lose, with most receiving no help in future with their childcare costs. How can this be a positive way forward?"

She went on to say that parents that were "working their socks off" should be helped rather than hindered.


Source