Tax-free childcare - government consultation - have your say.(58 Posts)
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.
Why discriminate against families where there is a SAHP? I don't think it is the business of governments to offer tax breaks to certain sorts of families and not others. Some families with SAHPs have very good reasons for needing childcare - families where there are significant caring responsibilities being shouldered, for example.
To give a real-life example: a middle-aged friend of mine has given up her very well-paid job because her elderly parents are frail and need help, her only sister is shortly to lose her H to cancer and has 3 DC in critical school years and that family needs huge amounts of support - and she has 3 DC of her own for whom she must continue to employ a nanny due to her frequent absences from home (parents and sister both live a long way away). This is France so she gets a tax break for her nanny whether she is working g or not. Frankly she deserves it and I think she would be rightly very cross if she had lost it in the circumstances.
Our childcare is £730/month and that is after the 15 hours free funding. The £1200 won't be 20% for a lot of parents who both work full time.
I'd rather stay home and look after my own children. Dear husband works very hard. No tax break for our family then.
And what about families where one parent is not well enough to work or shoulder much in the way of domestic responsibilities? Don't those families also deserve help with childcare?
I find this gross prioritising of the able-bodied who work for money as opposed to those who have quite possibly made very unselfish choices to care for others, or who have health or other issues, very distasteful.
I don't think it goes far enough.
I think every adult in the UK should get 1 full time to the age of 5 and part time from 5-12 childcare place tax free. (obviously only if working and have a child to claim the place)
I believe that most SAHMs are doing it because they think it's right for their children.
It is virtually impossible to find well paid part time work and only if this was available would it be of interest. Offering £1200 off a huge childcare bill would not entice me back to work.
Having the same job I did before on a part time basis would. But this was not possible due to 'business reasons', ie, the fact that the majority of the working world does 9-5.
Am I understanding this right?
At the moment I work very part-time, not over the tax threshold. I want to do the work though, so toddler DS goes to a childminder for 6hrs /wk.
DH is getting childcare vouchers through his work, which reduces the cost for us from £30 to £18 as he's a higher rate taxpayer (just).
With the new scheme coming in, does that mean he couldn't apply for the vouchers and it would have to be from my pay, which would be pointless and save us nothing as I don't earn enough to pay tax? I'm confused
So what happens to the childcare costs of parents with children over 5 if this replacing the childcare voucher scheme which currently has no such restrictions? This could mean that actually a lot of families are initially worse off until it's rolled out to older children.
With the trend of women having their kids later in life, there is every chance there will the situation of young children and elderly parents to juggle for a not insignificant number. Why not give these families the same help
This scheme either needs to be available up to 12 year olds straight away or it needs to increase the age range faster than one per year.
DH and I both work FT and neither of us are higher rate tax payers. We have one child and another on the way, who we have deliberately waited to have because we cannot afford to have more than one child in full time childcare at any time.
Because DC1 will be 5 YO the month before this scheme comes in, and will continue to be a month too old forever by the way the age limit is currently set to increase, we will never be able to benefit from this new scheme.
With just one qualifying child then in childcare, it is better for us to stay on the old scheme than to join the new one. Problem is, this means that from 2015 neither DH or I will be able to change jobs without losing out on childcare vouchers, or we'll just lose out anyway as the schemes slowly shut down over the following 7 years.
Not much of an incentive there for us!
I'd rather they helped people who have children to afford to be able to stay at home to look after them themselves rather than pay someone else to do it.
Not sure of the politics of it but iyswim..
I'd LOVE to go back to work, but I chose to have children and I have to be here for them. If I left them in childcare I'd feel like I'd had them for no reason...work has to take a back seat for me, till they are a bit bigger. At least till they can talk to me reliably about what they did all day.
Also as a single parent, I really fear the moment when the govt is going to say, either you work FT or we take away your CB etc. Here is some lovely childcare assistance so you can leave them with a stranger and go back to FT work.
It freaks me out - I didn't want to be single. If I was with someone, one of us would be here with them (given ideal circumstances). But I'm all they have got.
Also great that you lose all support as soon as one of you loses their job. Losing half of the childcare vouchers was bad enough when my husband was unemployed, if I had lost my entitlement too, would have made it worse - what with nursery notice periods, and actually needing childcare in place when looking for a job.
As for support for SAHPs - if you don't want to use childcare by your own choice, you surely don't need support in paying for it. This is discussing supporting those who need childcare. Really don't get this politics of envy.
Well. I'm staying on my current childcare provision of £243 thank you very much. My older child is in year 1 but we pay for afterschool club to the tune of £9/day. School dinners £2.25/day. Staff devt day £25/day.
Younger child costs £800/month in nursery. I use the £243 for her bills. Dh is self employed so none of this stuff.
£1200/child doesn't get me near as £243x12!! What nonsense are they talking about?
I am concerned about whether money placed into voucher companies will be safeguarded.
Will the money be placed on trust so that if the voucher company goes bust it cannot be touched?
Another issue is whether schools who provide before school and after school clubs will be compelled to accept payment via voucher.
DS's school has a breakfast club which does not accept vouchers....
Widow - sorry, didn't mean to come across like that at all. I'm not envious. Really not.
I was only saying that because I see so many people saying on here 'I would love to stay home and look after my baby but we can't afford to'.
So I suppose I feel sorry for people like that.
Also I'm coming from the POV of someonewho's concerned about the massive pressure on single parents to go to work when their child is 1yo. It might not be there yet but it's coming.
As Spirael has already pointed out, this new scheme is massively unfair to families with a child born before about 2011 - children aged 5-12 between 2015 and 2022 are going to need plenty of childcare after school and in school holidays and are going to get zero help with it. There aren't that many decent jobs which fit around school care hours. This aspect of the new scheme is the worst bit. It's also less money for families which currently have two parents in the old scheme but have only one child, but that bit doesn't seem quite so unfair as it does make sense to have a saving per child rather than per family.
I'd like to know why the government won't allow childcare costs as an expense against tax - surely that simpler than some arbitrary figure conjoured up by some wonk. I can't work without childcare - how can it not be a legitimate expense? (I'm self-employed, so childcare vouchers don't apply)
I also second every word that Bonsoir has posted. Why can't the proposals also take into account those who care for other family members or those with health issues? How can you talk about the 'big society' if you don't value carers (who incidentally save the state a bloody fortune...)?
This seems administratively complex. How are they going to link me & dh & dd together & check we are both working. There is going to be a minimum hours for employed people 16 i think but what about self employed? Could i do a few hours consultancy & claim. Who claims the vouchers i work 18hrs but don't pay much tax. Then there's all the admin for voucher companies & childcare providers... I would just have an additional transferable tax free amount *2 for lone parents & maybe scaled higher for under 5s.
It's frankly bollocks and a minuscule amount of what is required.
Either nationalise preschool childcare provision or push up wages to reflect the true cost of living.
This ridiculous tokenism is not going to have any real impact on families struggling to pay childcare bills that often represent 50% of their income.
I don't like it at all. You are wrecking the family. If someone wants to work full time let them, not everyone wants to.
We have plenty of working years before children and once the children are at school, it is only a few precious years children are small and so important.
As for this rubbish of wrap around school age child care, fine if someone wants to work, why all this forcing children to be with exhausted parents for an hour a day.
Make more term time part time jobs available around school hours instead, invest the money that way. Children need friends back for tea, after school clubs or to just hang out as a family after school.
I would rather the money go to support SAHM's to bring their own pre school children up if that is what they want. Allow families to afford to keep Mum at home who wants to, rather than generations of children brought up by strangers. Nobody will love and care for a child like their own parent.
This proposal is just another sound bite to win votes from 'hard working families'. I'm a SAHM but my dh works incredibly long hours and works really hard to enable this.
David Cameron and the Tories need to be careful that their not alienating their core voters with policies like this. Traditionally one high earner in the family who have already lost their child benefit and are being excluded again from policies which 'help' families.
Perhap's introducing a system whereby the SAHP can assign their personal allowance to their partner would help ease some of the perceived infairness!
I'm a SAHM, financially we're lucky enough that I don't need to work but sometimes I think I will get a job (when ds goes to school full time) which is just below the personal allowance tax threshold (dh loses his as he earns over a certain amount) just so I can take advantage of these policies..... Where are all the jobs though? Is it fair that I take a job I don't really need just because the policies which have been implemented push me into doing so.
It doesn't go far enough.
And don't get me started on SAHM whinging they're being penalised for/missing out on childcare help.
"If someone wants to work full time let them, not everyone wants to."
Childcare costs mean that not everyone who wants to can. I don't really see how this policy would force anyone to work who doesn't want to? It's not about making childcare compulsory, but helping people who need it access it. It's certainly not perfect as I said earlier, but it's not about forcing SAHPs into the workhouse.
Agree with general trend of this thread. It's difficult to see how this will be an improvement for some. On the other hand, plenty of people (and it's mainly women) are carers for children who aren't so easy to slot into childcare, whatever their age, e.g. those with SN, older children, and adult dependants.
I would like there to be incentives for companies who enable all carers to work more flexibly (e.g. remotely, in school hours/around the support they can receive, returning to work), rather than the current rather Gradgrind approach of "all your employees are probably trying to fleece you".
It's nowhere near enough.
I work outside the home. I want to work, I worked hard to get where I am in my field and don't want to take a substantial career break as it would be very hard to get back in. I'm also a better person for working, staying at home is bad news for me, mental health wise. Everyone is different I know.
So, both my husband and I work full time. I work for a charity, he's an engineer. We earn the same, a reasonable income, above average I believe but not enough for luxuries, holidays etc. Children in childcare 4 days a week, 1 day with family (We are lucky). Childcare is 1300 a month. That is almost three quarters of my salary. I recently changed to full time hours and the increase in salary was wiped out by childcare. I love working and I love my job, but if I didn't, I'd need a substantial incentive to return to work - otherwise I really would be working for nothing (actually paying to work, given costs for travel, clothing etc)
It's constantly worrying and we're not on the breadline by any stretch...
For instance, that policy where you were incentivised (as little as £2K in shares) for signing away your rights to working flexibly/redundancy pay was inspired.
Also, as an election policy, it's no more/less than what higher earner single parents lost when CB was taken away (depending on number of children). Whoop de doo.
I think this is yet another box ticked. We said we'd cover childcare for 'real' famies- job done. What rubbish!!! Why does this cover families who both work? This alone shows how out oftouch with real families the government are! Many SAHM's do so because they simply can't afford to re-enter the work place as a result of archaic childcare systems. This measure would realistically do little or nothing to change that. I don't know many (any?) families who can afford all their childcare until age 4 or 5 when children enter school, they all struggle to go back to work leaning heavily on grandparents who have had their time being carers of kids. Why is it that the government believes 4 or 5 is the age at which mum's can afford to stay off until, at which point 'childcare' is paid for?? The current system of childcare vouchers is a major barrier, not a help, as it is per parent, NOT per child- so with several children close together there is a have an have not system from the start instead of equal opportunity for all- remembering that this is not 'free' but a small perk for a hardworking family man IF their company does it.
I think this new measure is far too little, and too discriminatory. Please take a look at the way the Scandinavian counties set up their pre-school and early years childcare and take a leaf out of their book Mr Cameron. For an apparently forwards country we are still in the dark ages, relying on an elderly generation to take up the slack that your government doesn't want to address with anything more than a token measure.
Children of 5 cannot look after themselves; working parents need childcare cover which wraps around school hours.
...And the govt wants to introduce a scheme which only applies to kids under 5 and only for working parents?
What a way to simultaneously piss off parents of kids aged 5 and over AND those who cannot work due to caring responsibilities/health issues/lack of realistic employment.
Just because I am a working parent does NOT mean that I am willing to see carers shafted yet again as part of this monumentally deluded scheme.
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.
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?
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.
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.
Not "pattern" it should be "partner."
Just increase the amount of childcare vouchers people can buy - surely this has to be the cheapest way of achieving this?
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...
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.
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.
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.
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.
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.
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?
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.
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.
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?
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...
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.
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.
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?
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.
nannies sorry about that.
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?
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.
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