Frustrated @*&^! Shouldn't childcare be tax deductible!?!

[W6mum]

Who do I go to, where do I start to get a pressure group to force a change in law/policy? Any I can join???

I earn a good salary yet have this hideous amount going out on childcare, and that's along with doing all the bloody paperwork we have to do as 'employer' (nanny share arrangement so roughly same as nursery cost). After these costs I really am just working for some intellectual stimulation. Other ladies in my NCT group, inteligent women at that, cannot even afford to go back to work.

What the hell? I'm sure the legislation Baroness Scotland drew up then flaunted herself in her employment of an illegal Tongan nanny was all about getting mums to feel too guilty to pay cash in hand and use us as tools to effect Labour's failed anti-immigration measures (as if we didn't have enough guilt already)

So...... DAVID CAMERON - I want my childcare costs coming out of my PREtax income now!!!!

(Source: Sweeden Policy York.ac.uk research]]

In January of 2002, a nationwide fee, the maximum-fee system (maxtaxa) was introduced in Sweden. The maximum-fee implies that no one pays more than three, two and one percent of the household?s income for the first, second and third child in pre-school, and the forth child is without charge. Still, with the maximum fee reform no one is to pay more than 1 260 SEK (157?) for the first child, 840 (105 ?) for the second and 420 (52 ?) for the third. This has led to financially improvements for many families.

So it is schemes like that which make it more affordable in other countries.

If you are a low income family it effectively is tax deductible via tax credits. There are also vouchers. Unlimited childcare deductions would generally only help the families on above average wages.

Is now the time to be giving tax cuts to the well-off?

@LadyMuck - put like that... Sounds like they need to get a bit stricter on the first class travel and chauffeurs too then, in that case

Loads of places have. Very few employees have personal chauffeurs, and many more employers have cut back on the level of business expenditure. You're not going to be able to fund very much childcare by tinkering with tax deductions for chauffeurs.

From memory of course, your employer can claim a full tax deduction if they provide a nursery on site. In the same way that they can get a deduction for a chauffeur or first class travel.

No, I suppose not. I'm just a little aggrieved that as a family we can only get £243 vouchers as, being self-employed, I can't deduct an equivalent amount for childcare.

Nannynick - yes I think we are better off under this system. Taxes are high but as everyone pays that level it's not as much of a burden than you think. There's no NI contributions but you do pay ?90 per month basic health insurance.

The stated reason for the favourable tax childcare regime is to encourage women to stay in the workplace. The reality is that when the regime was less favourable more women left work.

My sons are in a crèche, but crèche places are hard to come by especially on Mondays, Tuesday and thursdays as primary school children have wednesday afternoons and Fridays off so a parent is usually home then. You used to be able to pay a relative using the tax system but they have recently tightened those rules, and now a 'gastouder' needs to have some qualifications in child development and first aid. Many people run small crèches through their homes.

The thing with childcare vouchers, though, is not that you're getting £243 towards childcare, you're getting £243 which is tax-free. So at 25% tax rate, you're only getting £60.75 a month off your bill. Which is better than a kick in the teeth, to be sure, but if my whole childcare bill of £1500 was tax-deductible, I'd be £375 a month better off, which is a huge difference.

And there's talk of the new govt stopping childcare vouchers anyway.

The thing is, LadyMuck, that for many families, one parent will earn much more than the other, which puts household income over the limit for childcare tax credits. But the other parent (usually the women) earns less than childcare costs, especially with more than one pre-schooler in the family. So the family are worse off if she went back to work.

But if childcare were tax-deductible, it would allow many women in this situation to return to work, and even though this would require some degree of subsidisation from the govt, in the long run, she would be paying taxes, contributing to the economy and being far more useful to our economic recovery than if she sat at home.

So, yes, IMO this is the time to be helping everyone to get into work by making childcare more affordable. With tax-free childcare for everyone, plus tax-credit top-ups for those who need extra help to make ends meet.

It's insane that anyone should be in a position where they can't afford to work.