Busy Bees campaigns for higher rate for Tax-Free Childcare

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Busy Bees Benefits has launched a second nationwide 'Mind the Gap - Raise the Cap' campaign to ensure the Government's proposed Tax-Free Childcare Scheme reflects childcare costs.

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The employee benefits company proposes that the Government raise the cap before the scheme is introduced.

It also recommends that the Government review and increase the cap annually to remain in line with average childcare costs. Childcare costs typically rise each year to match staff costs.

The scheme, announced in March, will allow families earning up to £150,000 a year, with children under five to claim up to £1,200 per child a year in tax-free childcare.

However, the Tax-free Childcare Scheme will not be introduced until autumn 2015 and both parents must be working to be eligible.

Parents will pay 80 per cent of their childcare fees and the Government will contribute the remaining 20 per cent, up to £6,000 a year per child.

However, this is lower than the current average cost of childcare, which is around £7,500 per year, Busy Bees Benefits says.

By the time the Tax-free Childcare scheme is launched in Autumn 2015, Busy Bees Benefits warns that the average cost of childcare could be even higher.

John Woodward, managing director of Busy Bees Benefits, said, ‘As the UK"s largest childcare provider, looking after more than 19,500 children every week, and a provider of the childcare voucher scheme, we understand the financial pressures on working parents.

'We want to ensure the Tax-free Childcare Scheme is fit for purpose from the outset and that the scheme does not suffer the same fate as the childcare voucher scheme, where the value of the support has been eroded over time as it has not kept pace with the true cost of childcare.’

In the first phase of teh scheme, 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.

To keep up to date with progress on the campaign you can follow Busy Bees Benefits on Twitter @BusyBeesBens or on Facebook.

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