Tax-free childcare - government consultation - have your say.

(58 Posts)
KatieMumsnet (MNHQ) Wed 25-Sep-13 16:06:47

Hi there

The government are currently holding a consultation on their tax-free childcare proposal.

The policy, announced by David Cameron in March is a money-back scheme where working parents can get 20% of the cost of their annual childcare costs up to a maximum of £1,200 a child. It is open to all families where both parent’s work or one parent works in single-parent families. The scheme will initially be for parents of children under the age of five, but it's the government's intention to extend that eventually to parents of children under the age of 12.

You can read Mumsnet’s guide to the programme here, the discussion thread at the time of the announcement here and the full consultation doc from the government here.

If you'd like to feedback your views, the government are asking about how the vouchers might work, how eligibility should be determined and for other thoughts on the programme.

To feedback your views via a government questionnaire you can click here

Or to provide a fuller response you can click here to download a response form.

We will also collate comments here and submit them to the treasury. The closing date for the overall consultation is the 14th October, but the closing date for the questionnaire is this Friday – the 27th.

Best MNHQ

YoureBeingADick Thu 26-Sep-13 17:32:40

same for vouchers.

YoureBeingADick Thu 26-Sep-13 17:32:03

ah- I wasn't aware of that- I am in NI, so not under Ofsted. here you can only claim childcare element of WTC for a CMer or registered day care provider. nannies cant be registered by the trust so you cant claim if paying a Nanny.

Snelldog Thu 26-Sep-13 17:26:16

sorry - not sure I understood your post? You can register a nanny to be paid with childcare vouchers? She just needs to be ofsted registered?

YoureBeingADick Thu 26-Sep-13 17:23:20

nannies sorry about that.

YoureBeingADick Thu 26-Sep-13 17:22:47

I agree- it should be entirely tax deductible- I've wondered this for years. I do also think nanny's should be registered in the same way Cmers are so that a nanny is an option available to those who work 'antisocial' hours. childcare for those hours appears to be very hard to find unless using a nanny or family, neither of which are eligible for the voucher scheme or the childcare element of working tax credits.

FreckledLeopard Thu 26-Sep-13 17:19:27

I don't understand why all childcare can't be paid for from pre-tax earnings. Or else why not massively subsidise childcare in the same way as a number of European countries do?

aliciagardner Thu 26-Sep-13 17:08:18

Agree with many on this thread who have already said that childcare should be fully tax deductible. All of it, not just to x amount. This should be for all families - whether one or both are working. The most simple way of doing this to my mind would be for childcare voucher scheme to be mandatory, and linked to employee rather than employer (so if an employee changes jobs they take their childcare voucher account with them). The employee can then chose to take up as much of the cost of childcare through voucher scheme as they chose, no caps, all before tax is deducted. Simple.

allmycats Thu 26-Sep-13 16:20:46

I think that there should be a review of the way that now people on basic tax rates are able to set aside £55 per week towards childcare vouchers through their employers and then neither they, nor the employers pay NI and it saves on tax for the employee too. I would like to see this set at a higher weekly amount and that it would be
compulsory for employers to operate this scheme at the request of the employee. I say this as a small employer who finds the system easy to use and cannot understand why it is not compulsory for employers to operate the scheme if there is a demand for it. (We only employ 5 people
and have no problems with the scheme - it DOES NOT take up any extra time after the initial set up and is easy to operate).
I also agree that both the parents should be able to claim it, giving them a tax free income of £110 pw to use for childcare.

I do not agree with SAHP having this sort of benefit.

wordfactory Thu 26-Sep-13 15:31:57

Tax credits.

Or perhaps being allowed to pay your tax break forward. It would be a huge boon to someone looking for work, or taking on, say an internship...

Snelldog Thu 26-Sep-13 15:23:11

tax breaks should be offered to more parents than just those in paid employment

Surely they are not paying any income tax - unless they have significant investment or other income to tax?

Bonsoir Thu 26-Sep-13 14:44:20

I think it was in Latin America (Mexico? maybe other countries too) that a fashion took hold a few years ago for monetary rewards to parents for getting children vaccinated, sending them to school etc - basically paying people to adopt the specific behaviours the government desired.

It's distasteful, patronising and fruitless. Even if you force the population into doing things they won't vote love you for it.

Bonsoir Thu 26-Sep-13 14:41:01

I think that the political course that consists of monetary reward through fiscal advantage for certain behaviours that are advantageous largely for the ruling élite is totally doomed.

Ahardyfool Thu 26-Sep-13 14:38:18

Oh, and the relevance of our responses will be...?

Exactly what interest does DC have in the issues faced by working parents on low incomes?

doorchairsettee Thu 26-Sep-13 14:28:22

Dear Treasury,

I can solve this whole thing so easily, raise minimum wage to the level that one income supports an average family to a comfortable but not luxurious level, including paying into an independant pension for both partners.

Then those that want one parent to stay at home can afford to and those that want a more luxurious lifestyle can work for it.

This choice would free up jobs currently taken by people who would prefer to be at home for those that wouldn't and completely eliminate the need for tax credits, housing benefit and other top up benefits for able bodied families meaning cuts wouldn't have to be made to help for the disabled and there carers.

I say all this as a working mother who would have loved to have stayed at home with my children, I also think that the age you expect parents to look for work under universal credit should be raised to 7 (starting junior school) rather than 5.

wordfactory Thu 26-Sep-13 14:17:26

See I can see why a SAHP would say that these proposals don't go far enough, and that the tax breaks should be offered to more parents than just those in paid employment.

I completely agree with that sentiment.

But some/many SAHPs seem to saying 'If I can't have it, then no one should.'

And I find that baffling.

These tax breaks will be no use to me. No use at all. But I don't begrudge those who can use them.

nancerama Thu 26-Sep-13 13:30:18

SAHM aren't "whinging" because they want free or subsidised childcare. Not all SAHM do so by choice, but by circumstance.

Not paying for nursery doesn't mean raising a child is free from all costs. Unlike my friends who use full time childcare, I have to feed my family 3 meals a day, heat the house during the day in the winter. Pay for craft items and activities. It's not the £60 a day a nursery demands, but nothing comes for free.

Rubberstamp Thu 26-Sep-13 13:12:07

The whole cost of childcare should be tax deductible. Quite clearly. Why limit to the current £243 a month or £1,200 a year (even less that the £243 tax saving, especially with two earners).
Full time nursery is c£1000 a month. I have one in FT nursery and one in afterschool care (£11 a day) about £160 a month on average. So I'm paying out £13,920 a year on childcare. At basic rate, I have to earn £16-17k to afford that.
Should be a tax allowable expense that either parent can claim regardless of what the other parent does or does not do.
Easy and cheapest way to do this is to expand the current voucher system (mandate employers to take part) and allow employees to choose the amount they wish to take.

frogwatcher42 Thu 26-Sep-13 12:48:37

Just ensure a living wage and then people can make their own choices. Stop subsidizing business etc by giving 'benefits' here and there while most people continue to genuinely struggle to survive. This would benefit most families with one or two workers and would not discriminate against those with a parent at home.

Make work worthwhile with a living wage and the government can stop having to pay for childcare, free school meals, tax credits etc. Then make all companies offer flexible working around children and there would not be such a need for childcare.

merrymouse Thu 26-Sep-13 11:52:18

Hmm. Maybe you could introduce some kind of flat per child benefit/tax break for everybody with children... Maybe call it 'child allowance' or something...

Snelldog Thu 26-Sep-13 11:44:16

Just increase the amount of childcare vouchers people can buy - surely this has to be the cheapest way of achieving this?

missinglalaland Thu 26-Sep-13 11:25:17

Not "pattern" it should be "partner."

missinglalaland Thu 26-Sep-13 11:24:48

As a SAHP, I don't want free childcare, I want some of the money I am saving the state to come back to my family (or not be taken off my working pattern in the first place.)
Frankly, we would spend it on health, nutrition and education. Not fancy cars and foreign holidays as some people like to caricature.

wordfactory Thu 26-Sep-13 11:14:24

I'd like to see tax breaks for child care whatever the reason a person used it. Work. Study. Caring for other DC or relatives. Unpaid work.

I suspect if that was introduced many more parents would go back to work. And many more would retrain, potentially entering the work place later.

I suspect that in the longer term it would pay for itself as a policy.

littlemisswise Thu 26-Sep-13 11:11:56

What SAHPs are saying is not whinging or "politics of envy".

Everyone who has children uses childcare of some sort, wether that be a childminder, a nursery or a SAHP. So if the Government are giving out tax breaks inorder for people who pay for childcare to keep more of their earnings, why can they not extend them to families where one person works and one person stays at home so they keep more of their earnings too?

Manchesterhistorygirl Thu 26-Sep-13 09:39:45

Here's a case study as to why some mums chose to stay at home.

When I was pregnant with ds2 I worked set days and a team of working mums had come to an arrangement with HR that covered the working week. (Shift pattern 7 days a week). When I went into work to discuss my retiring to work I was informed that I would be put back on a rolling rota and my days would move every week. Shifts started at 0500 or 0400 and finished between 1900 and 2100. How on earth could I arrange childcare on that basis given that dh works "9-5" Monday to Friday.

His hours in reality were more like 7-6 and he was away 2-3 nights most weeks. I spoke to the nursery that had been ds1's and they couldn't put me on a rolling contract for days and hours and neither could other nurseries in the area. I do have my mum, but she goes away a lot, and why shouldn't she? She's done her child rearing and whilst she loves having the boys no way could we ask her to look after them from early am.

This is all before we even factored in cost. When we worked that out I discoverd that the cost of just ds2's nursery wiped out my wage and part of dh. Then we had to factor in wraparound for ds2. Then petrol. It was not sustainable, but I loved my job (not career, job) and wanted to go back, but simple the economics made it undo able as well as impractical given that hours. Luckily I was offered redundancy so I took that instead.

Now dh works a 100 mile round trip commute everyday and his hours mean that I have to be here to do the childcare (school runs, etc).

Does this explain why some of us end up staying at home? We lost our cb and dh is now essentially trapped at the company he works for or he will lose childcare vouchers. Which we are saving for when I do return to employment.

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