Budget 2013: Chancellor George Osborne has confirmed that the current childcare voucher scheme will be replaced by a new tax-free childcare scheme for working families.
The change, which will come in from autumn 2015, will see the government provide working families with 20% of their childcare costs, up to £1,200 for each child.
This is equivalent to basic rate tax relief on childcare costs up to £6,000 a year.
From 2015, employers will no longer be responsible for providing employees with childcare vouchers, though the tax exemption available for workplace nurseries will remain.
The government will consult shortly on the detailed design and operation of the tax-free childcare scheme, including on how employers can continue to play a role in supporting their employees with childcare costs.