Frustrated @*&^! Shouldn't childcare be tax deductible!?!

The thing is, LadyMuck, that for many families, one parent will earn much more than the other, which puts household income over the limit for childcare tax credits. But the other parent (usually the women) earns less than childcare costs, especially with more than one pre-schooler in the family. So the family are worse off if she went back to work.

But if childcare were tax-deductible, it would allow many women in this situation to return to work, and even though this would require some degree of subsidisation from the govt, in the long run, she would be paying taxes, contributing to the economy and being far more useful to our economic recovery than if she sat at home.

So, yes, IMO this is the time to be helping everyone to get into work by making childcare more affordable. With tax-free childcare for everyone, plus tax-credit top-ups for those who need extra help to make ends meet.

It's insane that anyone should be in a position where they can't afford to work.

The thing with childcare vouchers, though, is not that you're getting £243 towards childcare, you're getting £243 which is tax-free. So at 25% tax rate, you're only getting £60.75 a month off your bill. Which is better than a kick in the teeth, to be sure, but if my whole childcare bill of £1500 was tax-deductible, I'd be £375 a month better off, which is a huge difference.

And there's talk of the new govt stopping childcare vouchers anyway.

Nannynick - yes I think we are better off under this system. Taxes are high but as everyone pays that level it's not as much of a burden than you think. There's no NI contributions but you do pay ?90 per month basic health insurance.

The stated reason for the favourable tax childcare regime is to encourage women to stay in the workplace. The reality is that when the regime was less favourable more women left work.

My sons are in a crèche, but crèche places are hard to come by especially on Mondays, Tuesday and thursdays as primary school children have wednesday afternoons and Fridays off so a parent is usually home then. You used to be able to pay a relative using the tax system but they have recently tightened those rules, and now a 'gastouder' needs to have some qualifications in child development and first aid. Many people run small crèches through their homes.

No, I suppose not. I'm just a little aggrieved that as a family we can only get £243 vouchers as, being self-employed, I can't deduct an equivalent amount for childcare.

Loads of places have. Very few employees have personal chauffeurs, and many more employers have cut back on the level of business expenditure. You're not going to be able to fund very much childcare by tinkering with tax deductions for chauffeurs.

From memory of course, your employer can claim a full tax deduction if they provide a nursery on site. In the same way that they can get a deduction for a chauffeur or first class travel.

@LadyMuck - put like that... Sounds like they need to get a bit stricter on the first class travel and chauffeurs too then, in that case

If you are a low income family it effectively is tax deductible via tax credits. There are also vouchers. Unlimited childcare deductions would generally only help the families on above average wages.

Is now the time to be giving tax cuts to the well-off?

(Source: Sweeden Policy York.ac.uk research]]

In January of 2002, a nationwide fee, the maximum-fee system (maxtaxa) was introduced in Sweden. The maximum-fee implies that no one pays more than three, two and one percent of the household?s income for the first, second and third child in pre-school, and the forth child is without charge. Still, with the maximum fee reform no one is to pay more than 1 260 SEK (157?) for the first child, 840 (105 ?) for the second and 420 (52 ?) for the third. This has led to financially improvements for many families.

So it is schemes like that which make it more affordable in other countries.

HAven't read whole thread BUT

• you are BOTH eligible for childcare vouchers, i.e £243 out of BOTH your wages - £486 should cover a big chunk of the childcare bill?

nannynick - offering childcare as a tax deductible expense would reduce the cost to the parent, which you could look at as a government subsidy.

katymac - yes, buildings and food costs, I can see how it all adds up. thanks.

It's about ratios & building costs

I can do with our ratios & a free setting or with a UK property and higher ratios but not as it is

TBH food costs are causing major problems atm but I won't go down the line of crap food

I think it might be possible as a co-op but it's tight

I would guess that other countries subsidise childcare in some way... perhaps by having state run nurseries.

katymac - am interested in this - how come other countries have cheaper childcare than us when so many of our childcarers are on minimum wage?

But tbh at the rates that childcare is paid the wages can't go up; I have done a significant amount of research on this (looking at it from the point of a nursery owner, a nursery worker and as an academic) & while childcare costs are so low childcare workers will never earn a 'decent' wage.

You have to have a level 3 to get minimum wage, level 2's are becoming less employable and unqualified are almost a waste of time

I agree with KatyMac... in my area a Nursery Nurse working in a nursery will get NMW. They may get a little more if they are Room Leader but not a lot. In my area £13k-£15k is usual for a full-time nursery job. Or put another way, about £5.80 an hour - so NMW for those aged 22+.

Currently the only thing that causes a rise in childcare salaries is the minimum wage rising

this would allow us to pay childcarers a bit more, and always above the table

Would it though? Has Childcare Vouchers seen an increase in salaries, has it seen an increase in the full salary of say nannies being declared? I don't know... but I'd doubt that it has made that much difference. Those who will fiddle the system will always fiddle the system.

I agree. I work three days a week and our fees are about £650 a month. We're lucky in that we both get vouchers but that only covers £486.

Having children is a lifestyle choice. True. BUT. The state NEEDS us to have children, because if no-one had children then when the current generation of workers retire, there will be no-one working to pay the taxes to pay our pensions.

So, it is rough to then penalise people for doing something the state needs people to do.

flying first class, that should have been....

Oh please, baited, there are very few careers where shift working is an option.

Of course childcare is a work-related expense! Definitely more so than flying first call or hiring a chauffeur!

I can't see that childcarers should be paid any less; it's an important job - just that as a work related expense it should be tax deductible - you can't work without it