Companies could get childcare help

Companies could be offered tax breaks to persuade them to help workers with childcare costs.

The government measures are expected to be announced in detail later this year.

But they are likely to include tax exemptions on all forms of registered childcare and tax-free childcare vouchers.

Getting women back to work by providing better childcare has been a priority for the government.

But critics say it has fallen woefully short of achieving its own targets, with provision still patchy and in many cases, too expensive.

Balance

Announcing the tax proposals, Paymaster-General Dawn Primarolo said: "The Government is determined to help parents to balance their work and family life.

"Employers have a very important role to play in helping their staff to achieve a balance, and particularly in helping parents meet their childcare needs."

She said the existing tax exemption on workplace nurseries could be extended to cover childminders, after-school clubs and approved home childcare.

Limited

Employers' childcare vouchers, which are already exempt from National Insurance, could also become tax-free.

Tax breaks on childcare outside the workplace would be limited to £50 a week for each employee, said Ms Primarolo.

And where schemes were introduced, they should be made available to the whole workforce.

Stephen Burke of the Daycare Trust welcomed the proposals and hoped they would encourage employers to do more for working parents.

"Only about one in 10 employers currently provides help - those are the employers who recognise the business case," he says.

"Many others want to help working parents but say the cost is prohibitive at the moment."

The proposals are open to consultation until the end of May, and are expected to be announced officially in the pre-Budget report in the autumn.