To be pissed off at the new tax free childcare

[childcarechallenge]

NC for this.

We have two DC in childcare and live in London. I'm starting a new job next month and my salary is 48K, after tax, student loan, childcare costs and tube to work plus a few other generally working expenses (clothes etc) I've worked out that I will take home less than £200 a month.

DH earns a good salary which is good because we almost completely rely on his salary for rent, bills etc. He just received a large bonus which pushes him over 100K which is the new limit for the new tax free childcare scheme from the government.

Essentially, between 100K and 120K after tax, student loan, the loss of his "tax free allowance" which is clawed back over 100K, and the fact that we will not be able to claim £4000 back on our childcare because he is no longer under 100K (This applies to BOTH of us because of his salary) means that of that £20K we are actually only £1800 better off. AIBU to think that this is complete robbery - DH works extremely hard, very long hours (sometimes 70 hour weeks) in a high stress environment and the government seem to take an obscene amount of his salary.

We have an opportunity coming up to move to a lower tax country in a year or so with his job and this just makes me really want to take it, AIBU?

Yes, he could take some parental leave, for example.

Tbh OP if DH is unable to do any pick ups or drop offs or support in any way (when did I last read about a woman who is unable to do any ) then it is going to be very very difficult for you to return to work at all unless you get a nanny. Your employer is unlikely to be impressed by you doing everything/ taking all the days for sickness etc when there is another parent to share it.

Cross posted, OK he has taken some days off.

Did a quick tax percentage calculator without including any deductions and her DH would only pay around 33k on a 100k income in Finland Fake so even better!

Is this for real?!

Where do I sign? Finland sounds like a utopia! My dc2 had chicken box at Xmas, and she's had 3 viruses since, I'm on 7 sick days for kids in the last 3 months, I have a very understanding employer but even so...but it's really dragging them to nursery when they are still recovering but not sick enough that i find so hard. Yes, vaccinate! Even without chicken pox mine get sick a lot on the winter time.

"If you treat people as rational actors in an economy, why would anyone do this?"
Good question. I think there is actually a rational answer in this case - to keep your position in the 'career' market, as another pp said make pension contributions, protect yourself against financial dependence on dh, and some people will prefer the life and maybe sometimes status comes into it? For many that won't be a good enough reason, and it would be interesting to know how many dparents decide not to go back to work for purely financial reasons ie because it doesn't pay enough after costs/tax etc.

Op would your dh consider asking to work part time or take parental leave? Make for a more 'equal' childcare responsibility model. I realise it's not what everyone wants of course.

Finland does sound great I agree! Is it quite a high tax economy?

There must be some downside to the way things are done in Finland? They, along with Denmark and Sweden famously are very family friendly, but we are always led to believe that taxes are high to compensate for this, but Natsku suggests not.

So where does the money come from? Or what do we have that Finland doesn't? Or is the much smaller population a factor?

One thing that definitely needs to change in the UK is the long hours/presenteeism culture. In the UK, especially in the city, it isn't the done thing to 'go home early' which seems to be before about 7 pm. Anecdotal evidence indicates that people aren't even actually working for all the time they are at work but they must be there, or else they are not 'committed'.

Going back to Denmark, they work much shorter hours, but appararently are just as productive. In fact, it is seen as being bad at your job if you don't get your work done so you can go home on time. It's also expected that men take a much more equal role in domestic lives.

Some parental leave (and not just 2 weeks) must be taken by fathers and it is much more the norm for men to do housework etc. It is not seen as acceptable for them to not do these things 'due to the demands of their work'.

But while we still have people, mostly men, queuing up to take these big jobs in the city, to the huge detriment to their home lives and where, due to the cost of housing within commuting distance, it seems that there isn't even much of a financial reward to giving up their lives for work, not much is ever going to change .

Cross posted about Finland and tax. How do they fund it - what don't they spend on instead? Are they a higher gdp per capita country? (Realises knows little of Finland's economy.)

We've been very lucky with DC1, when they are ill they just sleep 24/7 (i know how rare this is) so hoping DC2 is the same, so far it seems that way. Which means working from home (which I can do for my job) is a very real possibility, and I always did it with DC1. But with chicken pox, they spend so much time well but contagious that its a nightmare! I cant WFH with a well child, only a sleeping one.

The vaccine is 60£ x 2 I think. So £120 for no chicken pox, which is definitely worth it. It's a standard vaccine in other countries but we just don't give it here because its safer for the country as a whole to let it be unchecked in nurseries and schools so that nobody really escapes it before becoming an adult when it is more dangerous. It's sad that vaccination rates are low enough here that its better for the NHS to let everyone get chicken pox than only had 60-70% uptake in a vaccine.... But thats another topic entirely.

That is just your basic income tax, in Finland. Have you added on your municipal income tax of 17-23%? Plus your health insurance, medical card fee, daily allowance contribution, unemployment insurance, church tax......

Aha Barbara, cross posted about the structure of Finland's economy - would be very interesting to know!
Barbara's comment about presenteeism - op would it be possible for your dh to work from home in the evening? So he can do a pick up, stop work for a couple of hours, then start again? Same in the morning. If he's a valued employee maybe there is some flexibility?

Agree that the rewards for people in their 20s working in London seem to be diminishing - if you can't afford to buy and have to pay huge rents, aren't you working all those hours in order to pay your landlord? Whereas in the old days on such salaries you would be paying your own mortgage. Are we at a stage where the 'rational economic actors' would be moving out of London to cheaper parts of the Uk, even if it meant earning less?

Sorry, cross posted, DH cant really take any parental leave, it would ruin his career, they very much need him full time and its the kind of job where people get "paid to leave" quite a lot for underperformance or any reason really.

Despite all the people lining up to do these high paid jobs his boss has been unable to hire another member of his UK team (pretty much the same salary) for almost a year now - they keep failing the technical/maths test which is the same test DH passed when he joined the company years ago. He was looking for 2 people but has only managed to find 1 so far. As a result they are somewhat understaffed which explains the long hours.

Your previous post is totally contradictory - they are short staffed but let people go for spurious reasons at the drop of a hat.

Seriously OP if his job is that high a priority in the family you working full time as well will be incredibly difficult.

I dont really think that DH's salary is very relevant in this calculation

It is relevant because childcare costs are part of the household expenses. They're not solely your responsibility. So it's about whether it makes sense for you all for you to make the choices you make. You get other benefits from going back to work, not just the salary. So if you want to work then it's a plus for the family as you'll be happier and more fulfilled.

If you don't want to work, then don't. I'm sure the organisation will be able to find someone equally suitable for the role.

And you could make different choices. Living so close to London is very expensive, and so is having two children in full time nursery. If you can't manage on your combined salaries you're living beyond your means (yes that is ridiculous but that's London for you), and many people have to make much harder choices than you.

In that case it sounds as if your dh might have quite a lot of bargaining power op! If hardly anyone else can do the maths, he could perhaps negotiate a bit more flexibility re hours. Or a pay rise? (might pay for a nanny, pay for a house?). Not that I'm underestimating the importance of the 'would ruin his career' point, and obviously only you and he can judge what's possible.

Your previous post is totally contradictory

Yeah i guess your right. Not "job" but lots of people have left under those circumstances at his company over the last few months in different teams. But not in his role. Either way, they would not be happy.

More money could certainly be on the table at annual review in March/April.

Well Finland doesn't spend money on things like Trident so that helps, and the military is mostly a conscript military so that also saves money. VAT is higher I think, or at least more things are subject to VAT so more tax income is generated from it and everyone pays tax (there isn't the tax free allowance like in the UK but the lowest earners only pay 6.5% plus municipal tax) but my calculation didn't include pension contributions and union insurance payments as that varies. It seems that GDP per capital is slightly higher than in the UK but lower if you go by the PPP number.

If DH is so indispensable surely they would be understanding about parental leave/flexible working? Has he asked?

I do know that alcohol, tobacco, petrol and some consumer goods are very expensive in 'Scandinavia' (which I don't think includes Finland - I'm talking generally about Norway, Sweden, Finland Denmark and possibly Iceland, although obviously there will be differences across these countries).

Narky also lists lots of taxes, but I suppose the important thing would be 'can most people afford to live well' as in do they have enough coming in to pay for good housing, pay their bills, get to work, eat and have a few luxuries on top? The actual level of wages, taxes and cost of things wouldn't matter so much, if this requirement was met.

If your base salary was £100k, you paid £30k in tax, your basic costs were £50k and you had £20k left to spend on luxuries, you would feel better off than if you earned £150k, you paid £50k in tax, your basic costs were £90k, leaving you only £10k for luxuries.

But I get the feeling that society may be more equal in Finland etc? Fewer very high earners and isn't Finland currently experimenting with a basic citizens income?

ah yes, I agree with ciutadella I think your DH should ask for a payrise and use the 9% take home bonus to build a case. I understand it, hiring someone who isn't good enough can be mentally more draining than doing it yourself. Especially if they don't have the maths skills to ever get there.

Ooh - just thought of another 'non immediate financial benefit' of both dparents working, at least part time. It means that if one of you becomes ill/redundant you at least have one income still coming in - even if only p/t, that is a less alarming position from being left with no income at all.

Just continuing to beef about the London point - if on such high incomes/long hours people aren't saving (and I include buying a house in 'saving'), what exactly are people gaining financially from doing the long hours/high earnings/London thing these days, instead of moving somewhere cheaper and earning less but proportionately more, iyswim? (Apart from job satisfaction!) I suppose the answer is that most such earners in their 20s don't have dc so they are saving. Op's position perhaps arises from the fact that they had dc so young. Which means that by contrast they will be 'better off' later when they no longer have childcare costs.

That is just your basic income tax, in Finland. Have you added on your municipal income tax of 17-23%? Plus your health insurance, medical card fee, daily allowance contribution, unemployment insurance, church tax

That includes municipal tax but not pension or unemployment insurance and no one with half a brain pays church tax any more.

What is church tax? I realise this is a little off topic, but am fascinated!

But I get the feeling that society may be more equal in Finland etc? Fewer very high earners and isn't Finland currently experimenting with a basic citizens income?

Yeah there isn't such a big difference between lower earners and higher earners although there are the outliers who earn a lot, like the CEOs of the biggest companies. To be fair, I very much doubt her DH would get paid 100k for whatever his job is in Finland.

There is a basic income trial going on now but it seems a bit rubbish really, they could have done it better. But every citizen is entitled to a basic standard of living per the Constitution so that's a nice thing.