To be seriously pissed off at how little support there is for women returning to work?

[PassTheCremeEggs]

Ok so I've just gone back to work after second maternity leave. Two children are 18 months apart and so childcare is astronomically expensive. I want to retain my job so that when they're at school I still have a career so we're willing to invest now for the gain later on. Because nursery in London is eye wateringly expensive for two we have a nanny for the three days a week I have gone back to work for.

But what I just don't get, and feel so supremely hacked off about is why we should have to pay her from our net income?? Or any childcare for that matter (childcare vouchers aside which we are using to the maximum)

This means that the money we pay her is being taxed twice - I pay tax on it and then so does she.

No other employer pays their employees' salaries from their net income. Why should working mothers/fathers be expected to? As a consequence we pay our nanny more than I earn, just to hang onto my job for the future. We are lucky we can just about manage this (but are saving absolutely nothing each month) but so many people must not be able to afford to do it.

AIBU in thinking childcare should be allowed to be paid entirely from a gross wage? Am I missing something?

I think you are missing something. Having children is a lifestyle choice and it's up to you to pay for childcare or do it yourself.

We can only afford one child. That is the choice we made for us.

I am in a similar situation although for various reasons I had to give up my job and am now trying to get back into work.

the cost aside I agree with the taxation issue - although your childcare vouchers aren't taxed so some of it isnt taxed twice.

I find the whole process draining and stressful if i am honest.

have no words of wisdom just a sympathetic or 3

Yes, thanks. I understand having children is a lifestyle choice but you'll see from my post that I don't actually object to paying for childcare . What I object to is being taxed twice on the same slice of money. That was the point of my post.

I sympathise op.

The uk has the highest childcare cost in the world when viewed as a percentage of income.

Take some solace that things do start to get a lot cheaper as they become older.

Sorry that reply was to ReallyTired.

Surely if I employ a gardener, cook, or cleaner, that too is from my already taxed income?

But- I agree in principle, one should be able to get tax relief on privately employing others that are being taxed also.

Hmm, that wasn't a terribly helpful post by ReallyTired.

I agree with you OP. Childcare is extremely expensive. I too work (part-time) in a job that if I were to have given it up completely, it would have been impossible to re-enter when the children were older. I can neither afford to, nor wish to, completely give up my long-term career because I've had children. The government seem to want to encourage women back into the workplace but the cost of childcare - especially for those who do not have family-members to help out - is a real barrier.

Where I live, there are no childminders that pick up from the local school so I have one child in nursery 3 days a week and another at the extremely expensive private before/after-school club. I am not in a particularly poorly-paid job, but childcare costs eat up the majority of my salary. If I didn't want to be able to continue my career in the future, then it would hardly be worthwhile doing it financially.

Yes Medoc you're right - it is true of all of those; it's a situation that is unique to employing domestic staff. But a gardener/cleaner etc is probably seen as a luxury whereas I wouldn't describe childcare as that.

But how could you do it differently? If childcare was much cheaper, then either nannies wouldn't earn a living wage, or the government would be subsidising it, neither of which seems fair. What would you suggest?

Btw, whoever you employ - builder, electrician, gardener, ironing lady - you pay them out of your net wages, so your money is effectively taxed twice - why on earth would childcare be any different?

Surely that's what income tax is? A tax on income.
You pay tax on your income, you choose to use some of your income to pay a nanny, then it becomes her income. Which requires income tax to be paid.
I'm not sure where the problem is.

I completely sympathise Op, although don't know what the answer is.

Yes but a builder, electrician etc is self employed or an employee of someone else, not you.I am formally employing my nanny and have to pay her through PAYE. I am directly liable for her tax and NI, and my employer's NI. So I pay tax on my salary, and then hers too, which is the same slice of money.

A business who pays employees under the normal PAYE scheme pays them from their gross profit, then it pay its tax (as I understand it) I on the other hand pay tax, then pay my employee, and then pay tax again on the same money! That's why it should be different in my view.

Well- that depends entirely on ones own skills and availability! My garden probably wouldn't consider a professional gardener is a luxury, after it's been hacked at by me (or ignored by DH).

I also agree with cocktail- that we should not be paying those that care for our children any less than they already earn- childminders earn a pittance, for example, far below the minimum wage.

If employment of people was tax deductible (as it is for businesses, I presume) then that would create jobs, or at least mean less under-employment, surely? Effectively, getting someone to clean your home or do your laundry would cost 20-40% less.

Just to clarify, I'm not suggesting we should pay less for childcare (that's a whole other topic..) - just that if we are made to become employers for HMRC's purposes, we should be treated as other employers are with the same tax rules.

Our nanny earns £10 an hour net but it costs me £12.50 an hour. I've already lost that money in my own deductions when I've been paid, and then I lose it again. What I'm saying is we should be able to pay for our childcare from our gross income, so pre-tax. Nanny gets paid the same, but I don't get taxed twice.

Interesting the different perspectives that people have on it!

Oh, I see, you pay the nanny's tax. Does that count as part of her salary, eg on paperher contract is £5k but she takes home £4k as you've paid the tax, or do you mean you pay the tax and she takes home the amount in her contract?

Sorry, cross post.

And cocktail - you're right about the government subsidising it - but in my view this is what should be happening. More people back in work = more revenue for the government. Lots of SAHP = lots of strain on services and resources. I am not in anyway saying being a SAHP is a bad thing from a personal perspective, only that from a government's perspective having both parents working is better, particularly once children are grown up and both parents still have a career and lots of lovely tax to pay to fill the coffers!

Plus the way the system is now means there are an awful lot of unscrupulous employers paying nannies cash in hand to avoid exactly this situation, equaling loss in revenue for govt.

If you use a childminder, she is self-employed, paid out of taxed income and she pays tax. Same with a nursery, same with a builder, same with a tesco employee.
Can't see the difference myself, except you pay the tax directly with a nanny, rather than through higher costs with everyone else.

Totally agree OP. I am working PT (average of 36 hours a week) and take home about $800 a month after childcare is paid for and about $650 a month after working costs are covered. Continuing only because I am determined to stay working. I would earn more money stacking shelves at the local supermarket in the evenings for 30 hours a week! So sad that this is the result of being a qualified accountant. If I wasn't earning a good wage I would be out of the workplace.

The current set up is so convenient to men and I was not impressed that my questions regarding the cost were not answered by the MP who was on here last week. Quite frankly I won't be supporting the Conservatives until they start to listen and RESPECT working families.

ReallyTired Oh do one. I am sick and tired of hearing how having DC is a lifestyle choice. Having one or two DC should not be considered a luxury and the current situation is leaving many families in poverty. Cocktail Queen Having childcare is a necessity to having a dual income household while having a cleaner/builder/electrician/ironer is not a necessity. If they allowed full deduction of cost of childcare from dual income it would give many more women a chance at keeping their careers.

No easy answers. If childcare were made tax deductible, it would probably just encourage providers to raise their prices further. Every measure taken here in Australia (50% rebates up to a certain amount etc) has only resulted in that. I do agree that if the nanny is regarded by the government as a regular PAYE employee, the arrangements should be the same with regards to what income of yours their pay comes out of.

OP I totally agree with you although I have no solutions to share except some

ReallyTired
Really unhelpful post, why bother writing that?

The apparent inconsistency exists because employee costs are tax deductible only where they are incurred in the course of your business, and not for your personal use or to facilitate your employment. Nannies are not employed in the course of your employment so are not tax deductible.

You could argue that having a nanny makes it possible to go to work, but so does getting on the train, buying petrol or having clothes, but those things arent tax deductible either.

So basically, I sympathise, but there is a logic.

No useful info to add here but you do have my sympathies.