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Families will be able to claim tax credits for a wider range of childcare options, under government proposals.

Under the plans, households with an income of up to £43,000 will be able to claim tax credits for care provided in the family home, including that offered by nannies, as well as breakfast clubs, holiday clubs, and childminders for children over the age of 7. Currently parents have to use registered childcare such as nurseries and childminders for under sevens in order to qualify for tax benefits.

In addition, a new service is to be set up to approve carers that meet certain standards. Parents will have to use approved carers in order to qualify for the financial support. Care provided in the parental home by a relation of the child will not be eligible for tax credits.

The consultation will run until 16 August and the scheme is expected to be operating by April 2005.

The Daycare Trust gave a qualified welcome to the proposals, but said they didn’t go far enough. Director Stephen Burke said, “Light touch accreditation is a step in the right direction but it is primarily designed to enable parents to get tax credits and tax breaks. Why isn't the current regulatory system simply extended to cover all forms of childcare? Ofsted should be asked to regulate nannies and other childcarers to ensure consistent standards and avoid confusion among parents.”

The National Childminders Association also expressed reservations, though it welcomed the move to enable parents to get help with the costs of childcare for children over aged seven. “This new scheme must be developed in a way that ensures parents are not left confused about the difference between registered and approved carers”, said NCMA chief executive Gill Haynes.

Charity 4Children said that the new regulations would provide “much needed piece of mind” for parents.

“This scheme offers the potential to offer new flexible choices, with peace of mind and financial support for those who need it,” said chief executive Anne Longfield.