Parents are to receive tax breaks for employing nannies, the Department for Education and Skills said yesterday.

Help will be extended to those hiring people to care for children in the family home. But using relatives such as grandparents will not qualify parents for the cash.

Families earning up to £58,000 a year will be eligible for the tax break.

The scheme is expected to be introduced next April, in time for the General Election expected in 12 months' time.

At present, the tax credit is limited to those using childminders and nurseries.

It will be extended to nannies, childminders in families' homes and after school or holiday clubs.

Children's minister Margaret Hodge was launching a consultation on the proposals today.

She said: "We want all parents to have access to affordable and good-quality childcare. Expanding the range of children eligible should help thousands of families."

Childcare tax credit is tapered off according to income but can be worth up to 70 per cent of the weekly childcare bill, up to a maximum of £94.50 a week for one child and £140 for two.

The tax break will not be confined to those employing a full-time nanny, allowing families who share carers to claim.

Nannies and after-school club workers will have to register and undergo training such as first aid courses.

They will also be subject to criminal records checks before parents can claim the benefit for using them.

Ms Hodge said: "Labour is convinced childcare is now top of the agenda for this election campaign.

"It will be a major issue for parents and families come polling day."

Monday May 17, 2004