Four out of five organisations could stop running childcare voucher schemes after tax exemptions are abolished, according to research by the Institute of Payroll Professionals (IPP).


The survey asked payroll professionals their opinions on the government’s intention to scrap tax exemptions on childcare vouchers from April 2011.


A large majority, 78 per cent, were against the move and said that childcare voucher schemes were likely to be withdrawn as a result. One concern expressed was that removing tax exemptions would encourage some mothers to stay at home rather than coming back to work after having children.


Karen Thomson, associate director of policy, research and strategic visibility of the IPP, said: “We asked our membership to voice their opinions over the elimination of tax relief on childcare vouchers and we received an overwhelming response confirming our belief that this plan would influence a company’s decision on whether to maintain the scheme.


“The reality is that many organisations will not see the advantage in offering the scheme as it will just incur costs to operate and be a further burden to the payroll department.


“We will be writing to the Treasury on behalf of our membership and will publish the outcome shortly,” she added.


The government has been challenged on the issue from within the Labour party, with nine female ex-ministers, including Patricia Hewitt, Caroline Flint and Hilary Armstrong, signing a joint letter to Gordon Brown expressing opposition to the proposal. They say that since tax exemptions are worth around £2,400 to each of the 300,000 families using voucher schemes, the measure will be hugely unpopular with the electorate.


Childcare voucher schemes involve parents sacrificing up to £243 of their salary - before tax and national insurance are taken off - in exchange for electronic "vouchers" that are paid to Ofsted-registered child carers.