to be so peeved that we spend approx £1400 a month on childcare

[couture1]

I know I have to pay for the service but it leaves me with little left over each month and we need to salaries to get by. I dont want to give up work as 1 cant afford to and 2 Im hoping that when 3dc are at school in 3 years time we will be better off each month - but how do we manage until then?

Rant rant rant

violethill, your post yesterday saying I was only giving my "own anecdotal view"

who is giving anything on this thread other than their own anecdotal view???

I don't see any experts posting, do you?

and your comment that you like "to go to work to talk to rational people" made me PMSL

stepaway- I don't think that having to spend money on good childcare is a CHOICE at all. It is an obligation if both parents work. Some people can choose whether to return to work after having children but, as we can see from this thread, others don't really have a free choice. Not everyone has the type of job/ career where they can share childcare between them. Therefore, childcare is a necessary spending for a lot of families and it is v expensive. I would much prefer it to come out of gross income rather than taxed income but I don't think that will happen

Here's a novel idea. Let people keen more of the money they earn (in the form of giving each related adult and child in a household the full value of their tax allowances, perhaps, rather than making non-earners lose them and making the the working person/people effectively bear the full brunt), and decide for themselves how they want to apportion their spending, instead of handing it over to HMRC so the Government can decide their priorities for them.

Example 1: SAHM

Adult 1 - Income of £35000, tax bill of £10000. Leaves £25000.
Adult 2 (unwaged)- Transfers tax allowance to Adult 1, so family income now £26667.
Child 1 - Transfers tax allowance to Adult 1, so family income now £28334.

Family are automatically better off without any complicated and expensive to run administration or tax credit schemes.

Example 2: WAHM

Adult 1 - Income of £35000, tax bill of £10000. Leaves £25000.
Adult 2 - Income of £25000, tax bill of £6500. Leaves £18500.
Child 1 - Transfers tax allowance to Adult 1, so family income now £46500 instead of £45000.

Each subsequent child can offset tax by a further £1500 a year.

Have I done my sums right?

Another alternative for the self-employed might be to hire a chauffeur for work, which is tax deductible, and just let him/her drive your kids around all day. Then childcare would effectively be free. Only your kids would lose the ability to walk.

AnnieLobeseder and Loobylu

By choice, I mean you chose to have children and presumably thought ahead of time about how you would earn enough money to raise them. ie. either staying home to look after them or employing someone else to.

You have children. If you are working they need to be looked in a high quality environment. I genuinely can't see how, having had the children, you are now surprised that they cost so much?

I really have a very hard time with the idea that other people, who have chosen NOT to have children, should effectively be subsidising our decision to have them.

Blueshoes : if the gov't were to not tax working parents on childcare expenses, where would you like to see spending cuts? because back of envelope calcalculations suggest that massive cuts would be needed somewhere

stepaway, I am not balancing the budget as I accept that now will not be the best time to implement such tax changes.

But since you asked, I am happy to do away with child benefit in favour of full tax deductibility for childcare costs ... but hey that is just me.

Boffinmum's idea of a transferable personal allowance is also a good idea.

stepaway: "I really have a very hard time with the idea that other people, who have chosen NOT to have children, should effectively be subsidising our decision to have them."

That is not a valid argument. As franca already pointed out, our taxes pay for lots of things that we may never claim on.

To take your argument to its logical conclusion, the current system of state funded education, children's hospitals, child protection and other child-related services, child benefit/surestart grant/child trust funds/childcare vouchers should all be dismantled. After all, by your reasoning, childfree people would never use them

As another poster said, who educated and cared for the health of these childfree people to begin with? For them to begrudge state funding families (which I don't see a lot of, tbh) would be equivalent to their pulling up the drawbridge after themselves. I have no sympathy for such a view.

That childfree people don't benefit from others' decision to have children is grossly inaccurate. Who is going to fund these people's state pensions and who is going to wipe the dribble from their chins in the care home they end up?

but if you don't have any childcare costs and you lose child benefit thats not fair either

stepaway- in response to your post, I would have to agree with what blueshoes has already written. People who choose to remain childless unless undoubtedly benefit from the next generation as per her last paragraph.
If you draw your argument to the logical conclusion that only people who can fully afford to support their children should have them, you could get into deep water.......
I do think that childcare expenses should be tax free (for the second earner in a household or a single parent) as it is a direct expense related to your work. I agree, however, that there is no chance that the government will start to subsidise childcare at present.

blueshoes

You really debate well. I suppose, though, in the end it comes down to personal ideology and where you draw the line. I agree, if you take my argument to its logical conclusion then childless taxpayers wouldn't have to support schools, child healthcare etc. I accept that. BUT who says I want to take my argument to its logical conclusion?! I'm not favouring that at all.

(I could actually argue that the logical conclusion of your p.o.v. is that not only would taxpayers subsidise our children's childcare, they'd also subsidise their food, clothing, etc. I'm guessing that you would draw the line before that, right?)

I guess we won't agree on this one. Subisidised childcare is not something that sits easily with me. You feel it's in society's interest to pursue.

blueshoes

You really debate well. I suppose, though, in the end it comes down to personal ideology and where you draw the line. I agree, if you take my argument to its logical conclusion then childless taxpayers wouldn't have to support schools, child healthcare etc. I accept that. BUT who says I want to take my argument to its logical conclusion?! I'm not favouring that at all.

(I could actually argue that the logical conclusion of your p.o.v. is that not only would taxpayers subsidise our children's childcare, they'd also subsidise their food, clothing, etc. I'm guessing that you would draw the line before that, right?)

I guess we won't agree on this one. Subisidised childcare is not something that sits easily with me. You feel it's in society's interest to pursue.

Blimey - we pay £1200 per month for 1. Lucky old you!

stepaway, I don't believe that parents should be fully subsidised for bringing up their children. Only that it is a fallacy to think that subsidising parents and having state-funded facilities that benefit children do not also benefit the childless directly or indirectly.

I would not consider tax-deductible childcare costs to be 'subsidised childcare' as such. That implies that the state is giving some form of handout towards childcare costs. When in fact, what tax-deductible childcare does, is the taxpayer does not pay as much tax as he/she would have to. But the state still takes tax on any income in excess, income which that taxpayer would never earn in the first place if priced out of the workplace through high childcare costs.

The state may earn less tax on a particular taxpayer, but gets to tax new taxpayers that would otherwise not be working because of high childcare costs. Plus there is also their future income stream for taxing once childcare costs cease to be an issue because the children are older. Therefore, there are immediate and long term financial benefits to allowing childcare costs to be tax deductible. The effect is not necessarily that the state will rake in less taxes.

The crucial difference between 'tax deductible childcare' and 'subsidised childcare' is that if there is no one in paid employment in that household, then they cannot enjoy the benefit of tax deductibility if they use childcare, because there is no tax to offset against. In contrast, if it were structured as a 'subsidised childcare', rather than tax deductible childcare, then even that household with no one in paid employment would benefit from the subsidy in the form of reduced fees etc.

In the Italian system, I don't think that my family could ever qualify for a place in a council subsidized nursery. But I don't mind if our taxes go to fund these institutions. They are a help for families with a lower income, single parents, immigrants who are now an important part of our economy etc.

economy and society, etc etc

stepaway, I am happy to agree to disagree.

The reason why I feel strongly that childcare costs should be tax deductible is because it is a cost that must be incurred for a parent to continue working. In other words, it is a direct cost of being employed. If current HMRC rules allow employees to deduct expenses wholly, exclusively and necessarily in the performance of the duties of their employment, why shouldn't childcare costs be treated the same as travelling expenses and membership fees to professional bodies and enjoy tax deductibility?

In the current system, as pointed out earlier by ssd and annie, the government gets tax from the parents' income, then tax from the nanny's and carers' salary and from the nursery's profits that that parents' income was used to pay.

Childcare is a nice little earner for the government there. Must be great to have so many bites at the same cherry.

Many other governments see how this is illogical and allow childcare to be tax deductible.

Blueshoes, beautifully and eloquently argued but 'fraid you haven't got my vote.

and now i really must do as my MN name suggests and get off here or I won't actually have any income to pay (post-tax) for my childcare with!

stepaway, not looking to convince you at all.

travelling expenses to your place of work are not tax deductible

in a way, it's a non argument because it won't happen (tax deductibility of childcare costs). There would be too much leakage, the potential for fraud would be enormous and it would be hard to administrate.

I also still say that for a lot of people childcare costs do not suddenly get lower when the children hit school. It certainly doesn't happen that way in London unless you are lucky enough to have a job that's very local to the school or have fairly standard hours with a small commute (doesn't happen often in London!). Otherwise, I can't see how you would manage without a nanny or some other sort of support like local family or a flexible childminder who are hard to find.

I'd quite like a tax allowance based on the fact that I employ someone in my own capacity (i.e. as a person). So I pay my own tax plus I am responsible for someone else's and employer's NI. I think if they thought about awarding a tax allowance like this then it might start encouraging people not to employ nannies without doing their tax properly (a practice still extraordinarily widespread and one that must be causing a tax loss).

Other than that, think the childcare vouchers are probably as far as it will go for the moment and the best people could expect is an increase in those!

Tbh, I would rather the emphasis was on families who need carers or some form of care assistance for their children/adults in the family as I think it's that 'group' of people in society who need the most help and aren't getting it.

fox I think a lot of parents with children under 5 see the start of school as life getting easier, whereas its just more of the same, sometimes even harder as school has its own agenda. I see lots of posts on Mn about mums who have taken time out to raise their kids then think when they start school they'll just go back to work, easy as that.....they don't seem to think of the 13 weeks holidays/ in service days/ 9-3.15 school day , etc etc. and as we have already said, if you have no family around to help the childcare is down to you. but if you have taken years off and have more than 1 child often you then can't afford childcare once your kids eventually start school.

its a bit of a shock for a lot of mums I think. also hard if your kids are in nursey all day, then you find school hours much shorter and lot lot more days off that the school doesn't cover! also as nursery is a profit making organisation they will take into account most parents work till at least 5-6pm and will not ask them to come into nursey at 2.45 for somthing, they know parents can't usually just leave work like this. But school throws things like this all the time at parents and expect them to lump it.....

sorry for spelling mistakes, I can't type
nurseRy!!

"in a way, it's a non argument because it won't happen (tax deductibility of childcare costs). There would be too much leakage, the potential for fraud would be enormous and it would be hard to administrate."

If other countries (eg France) can manage it, I'm sure the UK could!

One of the reasons France makes domestic employees tax deductible and in fact offers tax breaks for employing people in the home is that it reduces the black economy.

"In the Italian system, I don't think that my family could ever qualify for a place in a council subsidized nursery."

Ditto for us in the French system - we'd never, ever have got places for our children in a council-run and state-subsidised crèche or garderie. But I am very glad that the children of the gardienne in our building have got places - they need them because they live in a one-and-a-half room apartment and their parents (gardienne and taxi driver) don't have much time to take their children out and about.

Ditto in Ireland - there are few subsidized places, and only those on low incomes and benefits are eligible.
And childcare isn't tax deductible here, there are no tax credits either, so I think you you have a pretty good deal in the UK.

I think 1400 for three children's care is very low actually.

You might find that hiring a live-out nanny is cheaper in the long run OP, especially as school pick up times will vary, and after school care costs as well.

We were paying 1000 per month for our one DC in nursery (9 to 5).

Now we could pay 500 per month for after school care (2 till 5), but I've taken shorter hours, as it works out cheaper - I haven't yet figured out what we'll do in the school hols.

In Italy nursery schools (for children in their 3rd yrs of age) are virtually free for everyone. You only pay for meals, and it's means tested. This is great, imho.