Martin Lewis, the founder of moneysavingexpert.com (pictured), is due to meet with Stephen Timms, financial secretary to the Treasury, today (13 August) to discuss flaws within the existing system, which were first highlighted by the Low Incomes Tax Reform Group.
The meeting was set up after Mr Lewis set out his concerns in a letter to children's secretary Ed Balls and in an article that appeared in the News of the World in July.
Campaigners backing Mr Lewis say that families with annual incomes of below £25,000 are worse off if they use childcare vouchers because it reduces their eligibility for childcare tax credits. The amount of tax credits awarded to families depends on the amount they pay out for childcare. However, any payments made using childcare vouchers are not counted towards their total costs. Therefore, families who use vouchers are entitled to fewer tax credits because their childcare costs are calculated as being lower.
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