This frontier shows economic growth in that the inputs which are seen as subsides in this case because they favour efficiency. And as we already know that the quantity of inputs to the production process means that an economy has increase its production potential.
Previously parents had only received tax free help if their employer managed the childcare facility.
The news came as the chancellor announced his twice yearly pre-Budget report. This stated that the government has capped financial support at £50 a week - well below the typical cost of £128 a week for a nursery place
According to a recent survey, parents in the UK pay on average £6,650 a year for each child.
Tax relief on £50 a week childcare spending could benefit millions of employees using registered childcare. However, tax exemptions will only apply to spending on registered childcare. This stated shows us how the government protects its people and not letting other people who come in the country to take advantage of the economy. Many workers who rely on friends and relatives to look after their children while they are at work will not benefit.
About one in ten employers provide some kind of childcare help to employees.
It is hoped that the tax break will encourage more firms to help out their workers and as a result has received a warm welcome from childcare charities.
Stephen Burke, director of the Daycare Trust, said: "Paying for childcare is the number one issue for parents calling our helpline.” This only meaning that demand for childcare will go high due to the level of income increasing through the subsides provided by the government. Also shown can be demonstrated in a demand cure below.
The cure shows that even the day cares will benefit from this because in the run
they might increase there costs as well since their on a high demand.
He continued by saying, “ The cost is simply beyond the reach of many families."
"The measures announced today will help more working parents pay for childcare. The Chancellor is living up to his reputation as the childcare champion," Mr Burke added.
However, other people are more sceptical about its merits. They believe it will add to the costs and complexities for employers, as well as raising national insurance costs for many employees who already benefit from NI free childcare and their employers.
Work-based nurseries are expected to retain their current tax and NI free status.
However, other forms of existing employer-provided childcare will be affected by the cap.
All in all although this may bring good news to the employees with children registered it will also bring the employers a rip off from the workers because many workers can take advantage from both sides both from the government and from their employers.