A WORCESTER company that will be affected by the withdrawal of tax and national insurance relief on childcare vouchers fears the move will have serious repercussions for many other Midlands businesses.

Accountants Rabjohns LLP, which has been advising other companies on the financial implications of the decision, is itself reeling from the news.

Employees taking up childcare vouchers from April 2011 will no longer benefit from tax and national insurance breaks, while employees who are existing recipients of childcare vouchers will have their tax and NI relief withdrawn from 2015.

Money saved from these withdrawals will go towards offering free childcare for 250,000 two-year-olds by 2015-2016, according to the Government. However, James Geary, business and tax adviser at Rabjohns, said the move would have major consequences for thousands of Midlands businesses, including themselves.

“Fifteen per cent of the Rabjohns workforce are users of the childcare vouchers scheme – and the removal of this exemption will mean that they will suffer financially,” he said.

“If Rabjohns’ situation is replicated throughout the Midlands, thousands of employees – at all levels of the workforce – and ultimately their employers across the region will be affected.

“Though the Government’s rationale that this will aid poorer families is laudable, the foresight is clearly missing – this move in my view is counterproductive, taking away the incentive for many mothers to return to work earlier after having children.”