Tories campaigning to remove the childcare maximum income threshold

[FlakyPastries]

Kemi Badenoch has announced that the Tories want to remove the upper income threshold on childcare.

This means all working families will be able to claim it, including those earning over £100k.

Do you agree with this policy?

My baby’s nursery charges £30,000 and the free hours and tax free childcare is worth around £15,000 - so this is quite a significant benefit for those currently unable to claim.

I believe we should have universal free childcare, yes. This should extend to non-working families as well.

Yes, she's onto a vote winner there as it was utterly insane to have a cliff edge at £100k, the exact same place where the tax free personal allowance tapers away too! It's done a massive amount of damage in terms of lost tax revenue AND causing shortage of workers in key areas like doctors and dentists who now often reduce their hours to stay under £100k thus causing longer waiting lists.

Not many people will be directly affected (not many earning just over £100k which children in childcare) so not a particularly good "vote winner" for the Tories, but it's ultimately the right thing to do and lots of people will have a more favourable view of the Tories for promising it - ultimately it will benefit far more people by bringing in more tax revenue and hopefully making healthcare and dentistry more accessible if workers increase their hours again because it's worth it to them to do so!

I'd also like to see higher tax free personal allowances for workers with school age children to reflect their additional costs in other ways.

Having a cliff edge and applying it per parent is a badly written policy.

If the cap isn’t removed, it should still be reworked.

This will be the policy that the Tories designed in 2014 and introduced in 2017 under Theresa May?

Now they are campaigning to remove it as a vote winner? Good of them...

Are they blaming someone else for it? They could have removed it any time up to July 2024 when they were still in power.

It doesn't really matter what you "give" to higher earners since they are paying most of the tax anyway.

These cliff edges always work in the very short term to raise taxes, but people very quickly get wise to them and change their behaviour accordingly and what was once a policy to raise tax becomes a policy of losing tax and really damaging to the economy in the long term.

It’s exactly the same with the wealthy tax idea. Might make money in the short term but after a month people will have rearranged their affairs accordingly (go to part time hours to get the childcare, dropped a couple of weeks living in the UK and increased a couple of weeks a year living in one of your other international homes to avoid UK wealth tax) and permanent damage is done to the UK economy that far exceeds the original tax raised.

Kemi is really showing she understands how to get the UK back on its feet. I’m not sure I’ll switch to vote for them yet but it’s bloody impressive stuff

I just don't understand how they can possibly justify paying for it. I absolutely agree cliff edges in taxation policies are wrong, and I think there should be much more pragmatic tapering. But this policy seems like a massive over correction to me. I think they're saying it will cost something like £700 million a year. If they really believe they can find that kind of money just by reducing the headcount at the Arts Council and the Environment Agency (which I personally am very, very sceptical about), then is subsidising childcare for the wealthiest people in the country really the right priority to be spending it on? It just doesn't feel like grown-up, pragmatic policy makes to me.

@Woodeny

Kemi is really showing she understands how to get the UK back on its feet.

Yup, and Burnham seems to also realise he has to start appealing to the voters.

It's about time that the party leaders actually started listening to the general public rather than sitting in their echo chambers. The likes of Boris and Farage (and Blair) understood that they had to appeal to the broader voter base and not to their own London Centric elite.

I'm slowly starting to become hopeful that thing may really change in the next few years regardless of which party wins the next GE. I hope we've "bottomed out" on the damaging/stupid political mistakes of the past 2/3 decades and can start to build up the Country again, as I say, whichever party wins, I think we're going to finally start to see improvements.

It now affects four times the number of people it did in 2014 due to inflation so has become a stealth tax.

If you scrapped it theb you’d get more tax revenue overall because people wouldn't be salary sacrificing to remain under the threshold- which is what we do.

Why do non working families need tax payer funded childcare?

But you have to look at the bigger picture. Ie more people earning over £100k so paying more tax (instead of cutting hours to stay under £100K), not just tax paying, but also producing things and providing services that WILL help grow the economy, reducing waiting lists if it encourages doctors and dentists to work an extra shift etc, being more productive in other industries/sectors to increase GDP etc.

I think some people obsess too much about the individual, i.e. "why should my GP on £125k get free child care" rather than looking at the benefit to the broader society/economy of that GP working 4 days per week instead of 3!

I don't know. I'm still worried. AB seems out of step with the country on the two most important issues, the economy/growth and immigration. Until he tackles those everything else is just rearranging the deckchairs.

Sensible decision by Kemi.

Part of the problem with the £100k threshold is that is when you hit that income you start to lose the personal allowance. The childcare was a double penalty.

Loving your work here. Off to Google if the Tories ever tried to raise the cap or talked about how they should have put a regular review of the cap in place.

I think we have to assume/hope the Conservatives from Cameron onwards are not the Conservatives of Kemi.

It now catches far more people as the £100k cliff edge hasn't changed since it was introduced a decade ago, so "fiscal drag" has dragged more workers into being caught by it. Or in reality, it's not because most people reduce their working hours or don't take promotions etc., to stay under £100k, or pay more into pensions to get earnings under £100k.

It wouldn't be so much of an issue had it increased in line with inflation over the past decade as the cliff edge would now be around £140k so wouldn't be catching your average GP/dentist or lots of other professionals.

Yup 62% marginal tax rate, PLUS student loan repayments, PLUS losing free child care, meaning "net" after taxes and child care costs could mean you end up worse off by working that extra day/shift etc.

Would you rather parties said “well we implemented that and although now recognise it was a bad idea we will stick with it” ? Your attitude is bizarre

Yep she's right on this. Still wrong on enough else that I ain't voting for her though.

I believe there should be a limit.
I also think the current system is unfair and disadvantageous to working mothers/mothers who want to work in particukar.

I do totally take that point, but by the same measure, “cutting red tape” and “reducing the head count at arms length organisations” comes with a bigger picture cost too. Behind the jargon, what they are talking about is actively making people unemployed in pursuit of this policy. And it won’t just be the redundancies in those organisations - there will be knock on effects across those sectors, which seems massively counter productive, when the creative industries and the green economy are two areas of the economy there we could - and in my opinion should - be actively pursuing growth.

It’s all a balancing act, isn’t it? There’s a cost and a bigger picture to every choice. I’m not against the policy in principle, but for me, it feels like the wrong choice for the economic reality we’re in.

I’m a bit on the fence because whilst I think most “benefits” of this type should be universal, I wouldn’t start with this one.

Child Benefit would go universal first, in my opinion, or at the very least should be judged on household income not what one parent earns.

This means all working families will be able to claim it, including those earning over £100k.

That is a bit socialist, isn’t it? Or even communist.

Perhaps they’ll introduce the Order of Maternal Glory, to encourage women to have children. It would make sense because then the country wouldn’t need to rely on dastardly immigrants to enhance the workforce.

Maybe it would be refreshing if parties actually admitted these things outright though - rather than always blaming others - especially in cases where that blame is inaccurate.