The new anti nanny tax break......(5 Posts)
The new £2k tax concession (per child) only applies to childminders and nurseries (or other regulated childcare) and yet for working parents working long hours often a nanny in your own house is the best and only option that works and it costs you less than 3 places at a nursery.
Mind you £2k a year when full time childcare in London is £14k in a nursery or £20k+ if you have a nanny is a drop in the ocean.
"Two million families will be offered up to £2,000 a year of state help per child towards the costs of care, David Cameron and Nick Clegg will announce on Tuesday.
The support package – one of the coalition's central election offers to middle-class working parents – will be available, when launched, for anyone with children up to the age of 12 instead of the previous cut-off age of five.
The £2,000 maximum is to cover 20% of the costs of childcare up to an annual maximum of £10,000 a year. No extra support is available for people with more expensive provision.
The package, originally unveiled a year ago, was to have been worth a maximum of £1,200 per child. It would be introduced in a single year in autumn 2015, rather than being phased over seven years. An extra £50m has also been found to provide extra help for children aged three or four from the poorest families.
Cameron said that "tax-free childcare will help millions of hard-pressed families" while Clegg highlighted "the £50m cash injection for early education providers to support those children who need extra help in their early years".
However, Labour described the package as "too little, too late".
Full-time childcare costs for a family with a two-year-old and a five-year-old are estimated at £11,700 a year by the Family and Childcare Trust.
The overall cost remains at £750m a year because the Treasury has revised its estimate of the number of families likely to be eligible for the scheme down from 2.5 million to 1.9 million. Ministers have also responded to complaints that the package would punish poorer parents in receipt of universal credit not paying income tax by agreeing they will receive help with 85% of child care costs, rather than the previous plan of 80%, a move that could save low-income families as much as £1,500 a year.
The scheme will be available to families working part-time because of the low minimum earning threshold of £50 a week, but is also on offer right up the income scale to parents jointly earning up to £300,000 a year.
And from the Times:
" The scheme, to be jointly run by Revenue & Customs and National Savings & Investments, will enable working parents to deposit part of their income into childcare accounts online. For every 80p paid in, the Government will add 20p up to a maximum of £2,000 per child. Only registered childcare providers will be able to be paid from the accounts which the Government claims will simplify payments.
Ministers agreed to raise the limit from £1,200 after receiving evidence that the average cost of full-time nursery care was almost £9,980 a year. The Government has made the scheme more accessible to part-time workers and those running their own businesses. Parents will have to earn a minimum of £50 a week and work for at least eight hours to qualify. "
Registered childcare could include Ofsted registered nannies. We use Childcare Vouchers to part pay our nanny. Have you read that they will be excluded?
Good point. However it is still pointless form filling. Parents know if a nanny is good without needing to pay and go through registration processes.
I think you are right that if the nanny is Ofsted registered then the new rules (if this government is elected next time - a very big IF and if the plan comes in) will pay.
So for example when we had 3 children under 5 and one nanny:
Parent puts up £8k and state pays £2k for child 1 and does the same for the other children. Cost to parent £24k, cost to state £6k. Plus parent pays to do whatever you have to do to get the nanny ofsted registered.
I'd quite like to change my heading for this thread... never mind.
HMRC have emailed me about this already today just now.... (even though I have not had an employee for a few years)
The Government has today outlined how the new Tax-Free Childcare scheme will work, following last year’s consultation. This email contains information on what the scheme will mean for parents and employers. We have included a draft email to send to your employees below.
If you currently offer childcare vouchers or directly-contracted childcare to your employees through an Employer-Supported Childcare scheme, you will be able to continue offering the scheme for existing members for as long as you want. Parents will not be able to join your scheme – or move employers within the scheme – once Tax-Free Childcare is introduced in autumn 2015.
Tax-Free Childcare is designed to benefit employees directly, helping working parents with their childcare costs, supporting them back into the workplace if they want to and helping them to increase their hours in work. Key features of the new scheme, which will be introduced in autumn 2015 include:
Help with childcare costs for a much wider range of working parents – available to around 1.9million families.
Providing all eligible parents with a government top-up of 20p for every 80p parents pay towards their childcare costs, up to a limit of £2,000 per child per year.
Unlike initial proposals, the scheme will now be rolled out to all eligible families with children aged under 12 within the first year of the scheme’s operation (rather than staggered over seven years).
With a single account provider – National Savings and Investments – the process will be simple for parents, and their money will be safe.
Run through flexible online childcare accounts which will allow parents to build up credit for use when they need it most, for example during school holidays.
Parents who are currently using the Employer-Supported Childcare scheme will be able to choose to stay in that scheme or move to Tax-Free Childcare. It will be their choice. Employers’ workplace nurseries will not be affected.
You can play a role in Tax-Free Childcare if you want to. You and your employees can familiarise yourselves with the key benefits of the scheme by visiting GOV.UK. The Government will provide further guidance in due course.
You may wish to send the following information to your employees:
For parents whose employer offers Employer-Supported Childcare
The Government is introducing Tax-Free Childcare, to help parents go out to work if they want to so they can provide greater security for their family. This will be available to all eligible employees from autumn 2015. However, it is important to note that you will not lose your ESC entitlement. You will be able to choose whether you continue receiving Employer-Supported Childcare or move to Tax-Free Childcare, although a household cannot be in receipt of support through both schemes at the same time.
The Government will provide clear advice and guidance to allow you to decide which support best suits your individual circumstances.
You can carry on in the current scheme for as long as your employer continues to offer the scheme. If you move employers after autumn 2015 you will no longer be entitled for Employer-Supported Childcare – although you will be able to join the new scheme if you meet the eligibility requirements.
Workplace nurseries will not be affected by the introduction of Tax-Free Childcare.
For parents whose employer does not offer Employer-Supported Childcare
The Government is introducing Tax-Free childcare, to help parents go out to work if they want to so they can provide greater security for their family. This will be available to all eligible employees from autumn 2015. You can register for the scheme direct with Government, open a childcare account, and receive 20 per cent support towards qualifying childcare costs, up to a limit of £2,000 Government support per child per year.
Tax-Free Childcare will be introduced in autumn 2015. The scheme will be rolled out to parents with children under 12 within the first year of the scheme’s introduction. The Government will set out further details of the scheme’s rollout in due course, in good time for you to factor in to your childcare plans. Further advice is available at GOV.UK"
why can't we all just get our Child Benefit back?
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