New childcare tax break to be announced by the Government today - what do you think?(387 Posts)
David Cameron and Nick Clegg are due to unveil new childcare plans in a joint press conference today, with further detail expected to follow next week.
According to reports, families could be entitled to claim up to £2,000 per child every year from their tax bills, to cover the cost of childminders and nurseries as part of a new government scheme to help families.
The new measures will not be means tested, and will replace the current voucher and allowances scheme.
We'd be interested to hear what you think of these proposed changes, particularly in the light of the changes to child benefit which have been implemented today.
It looks as though anyone who wants to be a full-time parent had better become a childminder - and look after the children of those who are lucky enough to find work!
HoratiaWinwood I am now ...
Our place of work offers this as a salary sacrifice benefit above and beyond the voucher scheme. I have just checked the example document they provided to us and the numbers seem right.
DP earns almost 40k and nursery fees are around 11k per year (I don't pay them so can't give exact numbers) so he is only taxed and NI'd on 29k of his salary
we definitely save more than £243 per month (I think ...)
I will go and have to check now.
That is also true. But if all childcare were tax destructible, they might be able to afford it, wouldn't have to struggle so hard to make arrangements that work.
NotAQueef - please check! I've just looked at my payslip (work at university too) and there's definitely a section called 'Childcare benefit' (£243)that's deducted from my basic pay. And then other deductions like Tax, NI, pension carpark etc...
Horatia I've just checked and the flexible benefit we use has no limits of the amount of salary which can be sacrificed (but not to below min wage)
Sorry for taking thread on a slight tangent.
"You will enter into a salary sacrifice agreement, whereby your salary is reduced by an equivalent amount to the Day Nursery fees. The fees are then paid directly from the University to the Day Nursery.
Info comparing normal childcare voucher scheme (also offered) with flexible benefit
Childcare voucher scheme
Managed online direct with voucher provider
Maximum amount that can be sacrificed is £243 per month
The amount of vouchers can be changed online at any time, subject to meeting payroll deadlines
Flexible benefits scheme
Administered by Human Resources
There is no maximum amount that can be sacrificed (although salary cannot be reduced to lower than NMW)
The salary sacrifice agreement cannot generally be changed within the financial year
Beer is taxed? "Well, let them drink champagne!"
Or, how about employing a chauffeur who happens to have a level 2 NVQ in early years care.
<might as well be sarcastic. This non-policy is just a headline waiting for all of our reactions to help them flesh it out into something still pretty crap but not a totally regressive - like the 50-60k taper.>
Surely salary sacrifice can't be used to pay 100% of your childcare costs out of gross income? Otherwise why aren't all parents working for companies that offer it?
"Otherwise why aren't all parents working for companies that offer it?" - because there's no incentive for companies to offer it? Many companies even get grumpy about offering vouchers. It's amazing that NotAQueef's company is offering it. I didn't know it was possible. But if they can do it, it seems it's possible that others could too without too much trouble.
I like the idea of employing an NVQ qualified chauffeur!!
This has all the hallmarks of another awful Tory policy..........seriously who have they got working on policy atm? I think my 14 yr could do better and I know I could!
If I were to use a local nursery (SW London) it would cost me £150 per day for my 2 (under 3). I'm not quite sure how much I would have to earn to cover it, but it's an absolute bloody fortune.
This sort of 'help' towards childcare is a bloody flash in the pan for someone like me.
If you have kids you may aswell just empty your bank account into a big pile and set it all on fire IMHO.
I don't work as the loss of income is far preferable than never seeing the kids and paying throught the nose for the priviledge.
as a nanny I drive the children around so I am already an early years qualified chauffeur. Alas I expect there is some tax rule that stops parents with nannies claiming they are a chauffeur.
Have the details been announced yet or will we be waiting months for that?
They should have just left things as they are. The cost of changing everything is almost certainly more than the amount they are saving.
Sounds to me like a man thought of this (sorry I know that's sexist)
I am assuming this would be brought in at a point when universal tax credits are in place and when in theory it would be possible to then allocate child benefit on household income rather than going on 1 persons salary. We are on of the "lucky" families who have a joint income in excess of 60k - but neither of us quite earn over 50k. Lucky to keep child benefit yes, but not so great to have the £800+ nursery bills each month. And we're not financially well off enough for me to stop working.
So to me this in theory sounds like a good plan. Base CB allocation on joint income, but then give tax breaks to working parents - and i don't mean mums, but situations where both parents work. However, whilst 2k sounds a lot, it makes a big difference if this is 2k off your tax bill, or 2k off your taxable income - as other people say, you already get over 2k off your taxable income at the moment via childcare vouchers.
Anyway I think it's a good idea in theory, assuming they make CB based on household income and are therefore compensating those households where both parents work and need to pay for childcare. But I also hope they make it for over 5s too - after school clubs can be expensive.
BBC hasd posted a document here: assets.cabinetoffice.gov.uk.s3-external-3.amazonaws.com/midtermreview/HMG_MidTermReview.pdf
But I can't find squat about tax relief for childcare costs... surprise, surprise.
I got really excited until I read this thread
DH and I both claim £243 vouchers every month -it sounds like we will be worse off?
WHY won't they just make voucher amount unlimited
come on Coalition HQ, you're obviously reading this
Oh oh... it does say something about preeschool funding for lower income 2 year olds. Oh good, not for my 2 year old. But, once again, I can be made to pay for someone else to have a perk which I:
1. Am not entitled to
2. Cannot otherwise afford
How is that fair?
So you don't all have to search for it:
"We will, for the first time, ensure that all 2 year olds from low income households can access 15 hours per week of early education starting with the poorest 20 per cent in 2013 before extending it to 40 per cent in 2014."
Oh, thanks Dave and Nick... Or is it Naive and Dick?
Is this instead of the free 15 hours per week? The 15 hours per week are worth almost £4k to me currently. The proposals will effectively double our childcare bill.
Strix I can not find anything in that document either.
The two year old funding has been around a while so that is not new.
Guess we will have to wait for the detailed version - by which time maybe they will no longer think tax deductable childcare is a good idea.
The telegraph reports that details will be announced on Thursday. But they also said that it would be awarded to WOMEN to pay for someone to look after THEIR children while they work (how irresponsible)
Gotta love the subversive digs at working mothers
why can't they just make childcare cheap/affordable at the point of use. All this faffing around with tax relief and deductions is just baffling and it is nigh on impossible to work out if you will be better off or not. Therefore I assume for most - not.
It's just another way for the government to make it seem like they care about the plebs while actually shafting a further 10% of the population they missed with the last announcement!
I wouldn't have let / let anybody mind any of my dc with only a level 2 in childcare. Thats just a GCSE.
I like some of the changes, it seems people would be better off than the current voucher scheme which doesnt currently save £2k a year and it also looks like it will only be paid to the working parents so no more state paid childcare for SAHP's.
Capping it to age 5 may backfire though. Whilst parents should be responsible for the whole cost of raising a child many wont want to pay full childcare so will simple leave and rely on benefits so we could end up paying more.
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