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?

Policy has been about not encouraging the British to breed and importing already educated adults from the EU to boost the economy. That might need to change...

Personally I find the lack of family policy in the UK quite chilling. It wasn't likely to end well...

Wow my heart bleeds for you right now. Get a grip and give your head a good wobble you and your DH between you earn way way way way way more than I do in a year and I probably work a damn sight harder than you pair. Your not exactly on the bread line so stop whinging about having to pay for childcare.

Hobo - am I right in thinking you haven't lived in the U.K. for years?

Bobo! Sorry

I last lived in the UK in 2006. But I have spent masses of time in the UK - probably ten weeks total last year and the year before that, for example. And have lots of financial interests there.

BoboChic we opted for nursery over nanny as locally its cheaper. Nannies in our area charge between £8.50 and £10 an hour and on top of that there is the cost of any additional activities etc.

Plus the high risk of having to cover Mat leave, Sick pay, additional costs of having to heat the house all day, covering holidays - I have no flexibility, not being able to use childcare vouchers etc we did look into it for my return this time but it really doesn't work in our favour.

Childcare in the UK really is extortionately expensive. It's a very profitable business... lovely for the shareholders...

I dont think earning £10/hour is so much. Its just the patents have to pay for £100/ day or something after paying 50% tax and ni. Had it before tax and ni then the quality of childcare due to higher income for the caree and the cost for the parents wont be this bad!

Nursery workers are very badly paid but nursery chains can be extremely profitable. I find the whole idea of private for profit nursery chains abhorrent. I don't think a situation should ever have been allowed to arise where something that is so very fundamental a service could be owned by private equity firms and the like. But hey ho it makes GDP look good...

Nannies are not badly paid in the UK and they seem to get away with quite a quiet life. Nannies here in France have to cook, clean and do laundry for the whole household as well as mind D.C.

Is the Nanny pay usually quoted as net or is that not the case anymore? So the Nanny receives £10 ph and the employer on top of that pays employee and employer NI and the employee tax, (and pension?) so that's how it adds up to a lot.

Bobo, I have given legal advice to a few nursery owners and chains and actually I don't think there is a huge amount of profit in it for many but perhaps for some.

I used a nanny (cheaper for 3 chidlren under 4 but tax was lower then ) and the next generation is using a nursery and I can see why as there are so many new obligations on employers even low earning people with a disablity who employ just one carer have to contribute into the new auto enrolment pensions for that employee.

Yes B, nanny pay is quoted net so Jime (or Jane) make £50k and keep say £30k of that after tax (guessing here) and pay the nanny £25k gross and £5k employer NI and nanny pension, nanny gets £20k after tax and her employer pays her tax, NI, employer NI, pension contribution and the employer has already paid tax and NI on the £30k the nanny might cost them out of their £50k wage. It mounts up. The downside of the nurseries is they don't like children in who are a bit ill. On the upstide the nursery is never late for work and our nanny was dreadful domestically, really bad but we endured it for 10 years for the continuity and no one is perfect - she was great with children. The fact we had to spend an hour every night clearing up her mess when we got home was tolerable. I might though today have used a nursery certainly for one child. Also with the nursery the child is not in your house. Our house was always totally trashed by the end of the day in terms of dirt, food, mess, toys whereas were it empty all day and no heating on etc etc perhaps would have been easier.

No one will ever feel sorry for those of us who earn quite a bit but still the point made on the thread is valid. If we worked out after mortgage costs and child care and work travel and tax/NI what people have net and use that to decide things like child benefit and if we pay childcare help for them then it would be a lot fairer.

EnormousTiger - some of the bigger chains have EBITDA of 20%

You probably need the critical mass like care homes. Like my psychiatrist father seeing people with problems, I have probably just seen nursery owners in a mess legally rather than the success stories.

Yes, I expect you are right about that. Successful nursery and care home chains do not as a rule communicate much about their profitability for pretty obvious reasons.

I tend to think that people are not yet up to speed when it comes to judging the quality of many services. The studies produced by the LSE and suchlike on nursery provision always seem very dubious to me.

Bobo tbh I think that much use of 'charity' in education is dubious, so in one way the private for profit sector at least is honest. Unless you are saying that nurseries should be public sector?

All I know is that the owner of my DC's old nursery used to send all the parents Facebook friend requests and then post pictures from various exotic locations .

Why is it more ethical for childcare or care homes to make huge profits that are redistributed to shareholders (who may not even be in the UK) than for private schools to use surplus funds to reinvest in their core business? That argument does not work for me at all...

I didn't say it was more ethical I think both are unethical in their own way. I wouldn't put a value judgement on it either way personally.

I do not have any issues with independent schools being charities. I do have a few issues with the lax regulation of private schools' operating policies that create entirely avoidable unfair competition issues with the state sector but that has nothing to do with their charitable status.

Also, everyone has a right to a free state school education. Parents have to pay for childcare, which is why the extortionate expense and largely for profit scenario is basically holding them up to ransom.

I don't agree with private schools being charities, unless they are doing something markedly more charitable than educating fee paying children. Private schools aren't the only misuse of 'charity' in education though. Large academy chains paying massive salaries to chief execs being another example. Education is a complex sector and decreeing that profit is always bad and charity is always good is naive.

No one has decreed that profit in education is always bad. The issue in the UK is that the profits from childcare (the extortionate cost of which is forced upon young parents) are significant and are not always even returned to UK shareholders. I do not think young parents should be fleeced.

I also think that the government and media fuel the class war around the charitable status of private schools in order to detract from much more unethical practices in other parts of the service economy.