Receiving Help with Childcare Costs from Employers and Receiving a Tax Break
Employees who receive help with childcare costs from their employers
are to receive a tax break. Tax is how the government raises money to
spend on public services, such as education, health and the social
security system. It can be levied on goods, services and range of
transactions, such as inheritance and profit made on the sale of homes
Workers will be able to receive up to £50 per week in subsidised
childcare services, childcare allowances or vouchers tax-free.
Subsidies are grants given by the government to encourage production.
This will be able to favour workers and will make labour more
efficient an example can be that a worker at a particular factor can
higher a baby sitter at times where she or he may not because she/he
has got the money through the grant which will make the efficiency of
labour at the factory more effective hence pushing up the economy
through the of the labour because of the subsidy. As might be shown in
the below production possibility frontier.
This frontier shows economic growth in that the inputs which are seen
as subsides in this case because they favour efficiency. And as we
already know that the quantity of inputs to the production process
means that an economy has increase its production potential.
Previously parents had only received tax free help if their employer
managed the childcare facility.
The news came as the chancellor announced his twice yearly pre-Budget
report. This stated that the government has capped financial support
at £50 a week - well below the typical cost of £128 a week for a
According to a recent survey, parents in the UK pay on average £6,650
a year for each child.
Tax relief on £50 a week childcare spending could benefit millions of
employees using registered childcare. However, tax exemptions will
only apply to spending on registered childcare. This stated shows us