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It is now cost effective for employers to offer childcare vouchers to their working parents. Childcare vouchers up to £55 per week are exempt from National Insurance Contributions (NICs) for employers and from tax and NICs for each employee. This means that employees can save over £900 per year if they are a basic taxpayer and over £1,200 per year for higher taxpayers. This can double if both parents have access to a childcare voucher scheme.
Tax credits are payments from the government. If you're responsible for at least one child or young person who normally lives with you, you may qualify for Child Tax Credit.
If you work, but earn low wages, you may qualify for Working Tax Credit. In some circumstances, e.g. if you are a single parent working 16 hours or more, you may be able to get help towards 80% of your childcare costs. The Working Tax Credit and Child Tax Credit came into force in April 2003, and they replace the Working Families Tax Credit, Children's Tax Credit and the child allowance within Income Support and Job Seekers' Allowance.