Armed Forces families get tax breaks as MoD introduces childcare voucher scheme

The Ministry of Defence (MoD) has announced a childcare voucher scheme for members of the Armed Forces to help them manage the costs of raising a family.

From next month, about 196,000 members of the Armed Forces will be able to convert a proportion of their salary into childcare vouchers.

Childcare voucher schemes are in widespread use across the public and private sectors, and can be used to pay for registered childcare from childminders and in creches, nurseries, and holiday clubs.

The scheme is based on a salary sacrifice mechanism, where Armed Forces personnel can elect to reduce their cash salary in favour of childcare vouchers, with potential tax savings of up to £1,200 per year.

Defence minister Derek Twigg said: “We continually look to improve the support for service personnel and their families, and we are fully aware that childcare is an important consideration for many of our people.

“This [scheme] is another step in ongoing efforts to ensure that we provide the best possible support to our personnel and their families, on operations and at home.”

The contract to provide the scheme was won by provider Sodexho Pass after a competitive tendering process.

A similar scheme for civilian MoD staff is planned for spring 2008.


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