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Govt to unveil new tax-free childcare scheme

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Some parents will be able to claim back up to a fifth of average annual childcare costs from the government under a new scheme.

From autumn 2015, parents will be permitted to claim back up to £1,200 per child – or 20% of the £6,000 it is estimated it costs per year on average for a childcare place.

The scheme will be available to parents who both work but earn less than £150,000 a year each. Couples who both earn £149,999 each will be eligible.

The new childcare scheme will initially cover children up to five years old but will later include all children under 12.

Prime Minister David Cameron said the plans, expected to cost £1.4bn and which will be partly funded by the abolition of the existing childcare voucher system, would be a “boost direct to the pockets of hard-working families”.

“If Britain is going to succeed in the global race we must help those who work hard and want to get on,” he added. “Too many families find paying for childcare tough and are often stopped from working the hours they’d like.”

Deputy Prime Minister Nick Clegg said: “The rising cost of childcare is one of the biggest challenges parents face and it means many mums and dads simply can’t afford to work. This not only hurts them financially, but is bad for the economy too.”

But Labour said 2015 was a long wait for many families.

“Parents will be disappointed that three years into this government they will not get any help with childcare costs for another two and a half years,” shadow education secretary Stephen Twigg said.

“While working parents won’t get any help before the next election, David Cameron is happy to help millionaires with a tax cut now.”