Case Study: 'Of real value to us is tax breaks on childcare'

FOR one young family in Edinburgh the Budget was more significant for what it did not include, rather than the announcements that it did contain.

Fears that childcare vouchers would be curtailed proved groundless, to the relief of 35-year-old Mark Locke.

Mark and wife Alison both work in financial services in Edinburgh, and with two children – two-year old Archie and Flora, eight months – they have been among the young families to have benefited from tax breaks on childcare.

"The one thing this Labour government introduced which has been of real value to us is tax breaks on childcare, as we now have both of our children in full-time nursery care. Without the tax breaks on childcare, many hard-working families would struggle to afford nursery fees. We are very happy that nothing has been done with them."

One potential downside is the freeze on personal allowances which mean any increases to Mark and Alison's pay will result in them paying proportionally more income tax.

In addition to the threat of paying more income tax immediately, next year's 1 per cent increase in National Insurance contributions may well wipe out much of the benefit of the childcare assistance. "That will be a downside, but we're quite happy that this year's Budget was not particularly exciting," Mark said.

Mark and Alison were also pleased that the 3p increase in fuel duty will be introduced in phases, with an imminent 1p rise followed by further 1p increases in October and January.

Mark commented: "As petrol prices have been creeping up over the last year, we're happy that the Chancellor has staggered the increase in motor fuel tax as we both rely on cars to commute to work."