Daily Mail

CUT COST OF CHILDCARE

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PARENTS could save hundreds of pounds a year by ensuring they pick the most appropriat­e childcare scheme for them.

Families can choose between childcare vouchers from their employer or the Government’s new tax-free childcare scheme.

Vouchers make childcare taxfree as money is paid into your account before tax and national insurance is deducted.

Basic rate taxpayers can claim tax relief on up to £55 a week of childcare costs — with a maximum annual saving of £930 for each parent. Higher rate earners can claim relief on up to £28 a week, saving about £620 a year.

Under the new tax- free childcare scheme every 80p put in is topped up with 20p from the Government, so returning the basic-rate tax on their payment.

Families can claim tax relief of up to £2,000 a year per child as long as neither parent earns more than £100,000.

But parents earning £20,000£40,000 a year may lose out on up to £500 a year under the new set-up. While higher-earning families, where both earn £75,000, could be more than £250 a year better off.

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