tell me I've dreamt this - DC proposing to give tax breaks to the middle classes (who can already afford this) to help them pay for their cleaners/nannies/gardeners????

Interestingly, if you are self employed and restarting work after having a baby, you get a "maternity allowance" of 105 service cheques! So a free cleaner for a year!

That sounds good as well porto (and the childcare provisions mentioned earlier).

I don't think teh UK could stomach a tax hike of that magnitude though!

x-posts vitaminC yes that sounds really good.

I am going to off and look for some links but basically, here, service cheques can be used for:

cleaning, ironing, shopping, transport for elderly or disabled people, gardening, minor domestic jobs, sewing (?)

The cheques cost 7.50, you can claim back 30% tax. The govt pays the agencies 21 euros for each cheque. The employee then gets sickness and holiday pay, maternity provision and NI and pension contributions. It also covers insurance for the employee should they injure themselves on your premises (this is something we normally would have to pay for).

If you employ someone outside the system and get caught you would be fined.

claig in that case why not do it for work to people's houses. At the moment people pay normal VAT on work to their homes while new builds and work to listed buildings attracts a lower rate.

Making this change on people involved in the building, renovation and allied trades would stimulate a lot more spending than a few people hiring min wage cleaners, and pull a lot more cash out of the shadow economy.

DC has said this in a misguided attempt to appeal to female voters, as the conservatives are aware they are losing support in this area.

Sardine, the cheques can also be used for decorators, odd-job-men etc, although certain trades are excluded as they require the tradesman to be registered with a professional body, which requires them to have sole trader or limited company status. There is also a ceiling which the worker must not exceed under the scheme I think.

I've used builders under these scheme, who were just starting out, then set up a proper business once their activity was up and running.

It also includes childcare, but only for children over 6. Under 6s are covered under a different (but similar) scheme as the costs are subsidised by the state.

"So on the basis of your hunch that people either have cleaners or do not, you think that a policy that has been implemented in several European social democracies is "not well thought out"?"

The policy that is in place in several European social democracies is ^not what is being suggested".

Pointing out that bolting these two pieces onto our regime does not make any sense, is not the same as dismissing the tax regimes of other countries. Unless you think that bolting these two pieces onto out regime makes it the same as these other countries.

'They would make more money if they did this for builders / decorators / electricians and the like.'

The fact that they are not doing this probably indicates that it is not about the black economy, but about increasing employment by stimulating demand.

"athing you say it would make us just like other countries in europe "

I would never say something so idiotic.

I said that far from being laughable and ridiculous and utterly unworkable, that the proposal had been tried in other countries, and that it might be instructive to learn from them rather than sneer at things on the basis of who said them.

Now interesting people familiar with this kind of tax deduction are here talking about how it works, so I'm listening.

"Childcare already has tax breaks"

where?

If you are going to say childcare vouchers, they are

1. being phased out and
2. not available to self employed people

Porto thank you for the further details

But that is about progressives, this is about Conservative policy to encourage employment, stimulating demand in Keynesian fashion.

claig porto has not confirmed what types of employment the change in belgium effected, nor what the situation is with tax generally etc

apples and oranges, people.

vitamin C - why do you assume that cleaners (of all trades!) are so terribly criminal? The lower tax threshold is due to be raised to £10,000, how many people working in cleaning jobs for cash earn in excess of that? (I don't know, and I'm sure you don't either, but a significant number are going to be on pretty low salaries).

They would make more money if they did this for builders / decorators / electricians and the like.

Childcare already has tax breaks. It does not have to be included in a wider system of domestic help.

Childcare is tax deductible in Belgium - this includes after school and holiday clubs, children's activities ie dance/Sports lessons and even holidays! School - the Maternelle part starts from 2.5yo and is free. There is a 99% take up rate for this. Communal creches are subsidised - the rates paid depend on your earnings and you pay a lower rate for subsequent children. (Though I guess it is unlikely you would have more than 2 there at the same time - multiple births aside)

Tax is MUCH higher though - the 50% rate starts at about 33k euros. We are taxed as a family. We have PAYE but do an annual tax return where we can claim these things back. Child benefit goes up the more children you have and there are tax allowances for children and non-working spouse. Only about 55% of women work. The optimum tax position is to have 3 children and only one partner working.

athing you say it would make us just like other countries in europe
but they include childcare
and you say we can't possibly do that
so it wouldn't make us anything like them

'I remain unconvinced that a 20% cut in how much you have to pay would cause the demand for cleaners to go through the roof.'

Portofino gave teh figures for Belgium. It was thought it would create 25000 jobs, but it in fact created 90000.

Every tax reduction counts and every tax rise harms business, which is why VAT rising by 2.5% to 20% depressed sales. A 20% cut is a big cut for teh people who are employing cleaners. It is quantitaive easing for people, creating employment in the real economy, rather than quantitative easing for the banks and their bonuses.

Sardine I think you're missing the point.

The 20% cut wouldn't necessarily increase demand straight away, but all those currently paying a cleaner "off the books" would be encouraged to do it legally. And any person starting to employ a cleaner/nanny/etc in the future would hopefully go straight to the legal method, thus reducing the shadow economy even further!

I thought you'd gone.

Please can you address the points raised on the thread about implementation, assumptions about number in the shadow economy, numbers coming under the lower tax threshold and so forth.

Thank you

I would ask claig but her answers usually fox me even when I'm not on drugs

I remain unconvinced that a 20% cut in how much you have to pay would cause the demand for cleaners to go through the roof.

I also don;t understand how it would be implemented without changing our entire taxation system.

"What planet are you on that you don't think affordable childcare is more of an issue by a factor of about a zillion to people in the UK across the wage brackets, than tax deductible cleaners?"

Who do you think said that?

I certainly didn't.

Making childcare tax deductible would be enormously costly, as outlined by Quattrocento earlier.

How do you want to pay for it? Or what do you want to cut to pay for it?

I'm all about tax-deductible childcare, but I don't see why I should be against this measure unless it includes childcare.

The argument that "something else would be better" has nothing to say about how good this is.

It's contradictory to say that the proposal as it stands is unworkable, but that you would support it if it was going to be include something else (that YOU want) that would make it massively expensive.

Porto, it's a similar situation here in France, although they've been around a bit longer - since the mid-90s I think (certainly existed when I got married in 97).

They changed the system slightly around 5 years ago, to simplify it and there are now also vouchers, which some employers offer their staff (as a tax-free benefit, in addition to pension, private health insurance etc), which can be used in the same way - to pay for childcare, cleaners...).

It's great for employment. Anyone can start a cleaning business, you don't need to go to university to do it. All it requires is hard work and enterprise, things we should be encouraging. The other thing it requires is demand, people who will hire you, and this policy is about increasing demand. It is pure Keynesianism. If Cameron wssn't a toff, the progressives would be all for it, just as they are in Sweden.

What are the childcare provisions like in belgium, porto?

Was it just cleaning and gardening that was included, or were there other things? How does it work - are families taxed together or individually?

I just think that this is all a bit apples and oranges.

I was trying to find some stuff on the Belgian decision to do this (in English) to link to. I will have another search - but I did read that it's intention was to create employment and cut down on the black economy. It started in 2004. A comment dating from 2006 was that it was expecting to create 25000 jobs, but in fact vastly surpassed that at 90000. So taking that as nearly 1% of the Belgian population, and extrapolating you are talking the potential for nearly half a million people working IN the system, paying tax, or at least claiming fewer benefits in many cases.

Obviously a lot of these people WOULD have been working already - but cash in hand.