In this year’s budget, Chancellor George Osborne cut child benefit for higher rate taxpayers. Child Benefit will be reduced gradually by 1% for every £100 earned over £50,000. Anyone earning over £60,000 will lose the benefit completely from January 2013.
In households where one parent earns over £60,000, the loss of child benefit can be offset by ensuring that working parents take advantage of childcare vouchers. For the eldest or only child, child benefit amounts to over £1,000 a year. Higher rate taxpayers taking childcare vouchers can save up to £624 per year on childcare costs by using childcare vouchers to pay for their registered childcare. If the other parent works and is a basic rate taxpayer, they can also save up to £933 per year.
John Woodward, managing director of Busy Bees Benefits, said “The announcement about cuts to Child Benefit is naturally a blow to some families, but childcare vouchers are the obvious way to offset this financial loss. As part of the Busy Bees Group, the largest childcare provider in the UK, Busy Bees Benefits understands the financial pressures experienced by all working families and welcomes the opportunity to help more parents to save money on the cost of childcare”.