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.

We need to find ways to get rid of all these crazy tax cliff edges, so beloved of the Lefties as their hate/spite/envy gets in the way of common sense and what's good for the country.

I think you’ll find they were a rightie policy. Were they introduced as a result of hate, spite and envy? George Osborne has a lot to answer for.

5k 😩 so expensive. We don't have kids so it's just the tax free allowance that affects us thankfully. For those in the 100-125 bracket with kids, they actually pay to go to work. It's crazy.

100k used to be a high salary back in 2010 when the loss of tax free allowance started. But it hasn't changed since then. More people every year are in higher tax brackets, where on earth is all of that extra money going

Yes it wasn't labour who started it. It's an effect of keeping the electorate on side. Making bad economic policies to win votes because most people don't understand how the economy works

Well it kept the Tories in power for 14 years so it obviously worked for them.

The libdems were very influential as part of their coalition agreement.

They had no influence after 2015. I make that another nine years for the Tories to reverse it if they wanted to.

These are examples of piss poor management of its employee supply chain.

A skills gap in your company is a management issue.

If they are earning over £00k then they really aren't paying to go to work.

They are if their wages increase from £99k to say £104k. The Extra tax, combined with removal of free childcare means they can easily be worse off. It's the "extra", i.e. marginal rates that apply for decision making.

Just the same way at the bottom end of the earning scale, where someone could end up worse off by working more as not only do they pay tax and nic, they lose some universal credit and other benefits.

It's always the margins where behaviour is driven by the "marginal" tax rates and/or loss of benefit rate. Decisions are made on these marginal increments.

I think it is good the Kemi is recognising poor policies of past Conservative administrations. Even as a supporter of hers, you'll never get her to publicly denounce her party, especially one that she served in.

But we are where we are, and in the absence of an acceptable untainted candidate, I can only judge on what they say they will do going forward, and if that involves undoing the mistakes of the past, even if we don't get a clear apology and recognition it was her own party that instigated it, I can accept the politicking - so long as we reach a fairer position at the end.

It always frustrates me that people talk about Tory administrations as being for the rich. Under successive Tory governments we have seen

Pension Tax-Free cash reduced (several detrimental changes)
Tapered annual allowance for pensions
60% Tax trap
Frozen income tax thresholds
Reduction in additional rate threshold
Frozen IHT thresholds
Reduced CGT exemptions

What part of this involves "cosying up to their rich mates" etc?

This wasn't enough for Labour, so since they arrived we've seen

VAT on school fees
Pensions becoming in scope for IHT
Reduction in APR and BPR

In an ideal world I'd like to see all thresholds restored to where they would be, in line with inflation, a removal of the personal allowance taper, and removal of school fee VAT, but given our addiction to spending, and current position, I'd accept an unfreezing from now onwards.

There was a global pandemic and barely anyone was flying 😆 It's a worldwide issue affecting all airlines

This is the problem, most people have no idea. If someone earns £101k they lose their right to childcare support. Which in London can be 30k. So yes, in fact they would be effectively paying 29k to go to work! Thats 29k net, so half their salary gross roughly.

@Everanewbie

It always frustrates me that people talk about Tory administrations as being for the rich. Under successive Tory governments we have seen
Pension Tax-Free cash reduced (several detrimental changes)
Tapered annual allowance for pensions
60% Tax trap
Frozen income tax thresholds
Reduction in additional rate threshold
Frozen IHT thresholds
Reduced CGT exemptions

And IR35 to catch NHS locums, TV presenters and IT consultants (many of whom have moved abroad to avoid it).
Increase in CGT rates
Increase in dividend personal income tax rates
Increase in corporation tax
Increase in stamp duty

Basically everything possible short of increase income tax rates.

All we ever hear about the Tories post 2010 was "austerity" but they also hammered "middle England" with lots of different tax hikes.

You really can't say that Covid was "piss poor management".

Yes. Childcare on its own for two children is basically the whole of a £100k salary net. That plus the 62% kicking in at £100k is why so many people do what they can to keep adjusted net earnings under £100k. I think that’s why it’s a relatively small proportion of people recorded as earning over £100k - because so many people go part time or salary sacrifice to avoid being over that £100k. It’s so damaging to productivity.

Allowing people earning over £100k to keep the personal allowance is estimated to lead to £500m in extra tax I think I saw recently. I think it would be similar here also. I agree they need to do something about child benefit thresholds also, but it’s this double whammy of huge tax rise and loss of childcare where it’s most acute

Come on no one is paying £68k a year on childcare.

Who said covid was piss poor management?
Losing all your experienced staff during the pandemic because you havent made staying an attractive proposition is piss poor management.

Covid was a bad experience, handling it badly was a choice.

So fuck all to do with the £100k cliff then.

I'm not talking about 'shares' (an investment), I am talking about assets - flats, houses, buildings etc.

I was paying over £60k a year for nursery last year (not London). Take off tax for private healthcare and student loan, and there’s no change really. Then most people have a commute (£30+ a day for me) to get to work. A lot of people with two kids close together are paying to go to work, but wanting to keep our jobs open

It was cheaper before labour did their NI increase, the bill went up hugely at that point. I was paying just under £2k a month when my eldest started nursery three years ago. It went up to just over £2.5k per child after the free hours expansion and NI increase. Baby room hours cost more, so my youngest we paid extra.

I now have a nanny, which is slightly cheaper. But Nannie’s are hard to get. I have friends currently paying these amounts. It’s why most of us earning these amounts that I know are sticking to two children- cannot afford more years of double nursery and cannot afford to wait as we had our children a bit older

These round and round discussions boil down to there being too much taken off people by the state for redistribution or for the state to use inefficiently to provide things not everyone values.

I am not saying that there is no role for the state or that there should be no redistribution, but things are badly out of kilter and we are entering a doom loop.

It is perverse that high achieving women are dissuaded from working or having as many children as they would like, and without state interference could afford. And why? So that the ideologues and envious can be placated. Since when is it moral to hinder someone else’s life and struggle?

The lower working class are simply fixating on the upper working class and trying to hurt them. Very ugly. I say working class because no one working and worried about childcare costs is independently wealthy, they depend upon earning a wage.

It is perverse that high achieving women are dissuaded from working or having as many children as they would like, and without state interference could afford.

You do realise that without state interference there would be no free childcare for anyone?

You do realise that I said:

I am not saying that there is no role for the state or that there should be no redistribution, but things are badly out of kilter and we are entering a doom loop.

Applying childcare as we do creates a labour market distortion which is much more serious than the £300 - 700m cost. This thread has argued that the money is needed for things more important than working mothers. I don’t think so.

This. I’m not sad about it, because I’ll now have an amazing pension so will be able to retire early, but I’ve been maxing out my pension contributions for years to stay under £100k. If it wasn’t for the cliff edge, combined with the 62% effective tax rate between £100k and £125k, then I would have taken more income, paid more tax, and spent my additional income in the wider economy.