Currently 340,000 working parents in the UK use childcare tax efficiencies and the Government's proposals to reduce the tax break could cost working families £2,390 every year.
Following research suggesting 60% of parents would consider leaving their jobs if the relief on childcare vouchers was scrapped, the Government has indicated such families will be allowed to continue to use the scheme.
A spokesman from the Save Childcare Vouchers campaign, said: "This is good news for parents, employers and the childcare sector in the UK. The growth of childcare vouchers over the past four years has helped over 600,000 people access quality childcare for their children. Keeping the tax relief will mean parents will continue to receive the help they need to manage the difficult balance between work and family life."
The news follows nine ministers writing to the prime minister urging him to rethink his controversial plans to scrap tax-exemptions for childcare vouchers.
The letter came from the Progress think-tank and its signatories are from nine former cabinet members, including Patricia Hewitt, Estelle Morris, Hilary Armstrong, Beverley Hughes and Caroline Flint.
