At the Labour Party Conference in September, Gordon Brown announced the Government's intention to scrap childcare voucher tax relief. The plan involved closing the scheme to new entrants after 2011, and ending tax relief from 2015 for all those still receiving vouchers.
Since then, the Government has faced a backlash from its own MPs concerned that such a policy would cause the party to lose votes at next year's general election. A No 10 petition to stop childcare vouchers being axed has been signed by over 80,000 people.
Reports from Downing Street 'insiders' suggest the Government will revise the plan, with a view to scrapping the relief for higher-rate taxpayers. This would ensure the scheme remained open to three-quarters of those currently involved, but would remove the benefit from around 100,000 employees.
Employees paying basic rate tax save up to £900 with higher rate taxpaying employees saving up to £1,200. Employers save up to £373 a year for every employee who joins the scheme.
The Pre-Budget Report is due on Wednesday 9 December 2009.