NEW Childcare Exemptions Order March 2010

[nannynick]

Whilst looking up the Childcare Exemptions Order 2008, I found Childcare Exemptions (Amendment) Order 2010 which is a result of the two police women's case.

The amendment is:

(2) In Article 3, after sub-paragraph (c) insert the following?
?(d)for?
(i)i)a child or children in the course of a friendship with the parents of that child or children; and
(ii)the provision is not made in exchange for payment.?.
(3) In this Article ?payment? means a payment of money or money?s worth, but does not include the provision of goods or services.

So "for reward" is now being defined a bit by using the term "payment" and stating that it is "payment" is money or money's worth.

What do they mean by Money's Worth?

They mean 'you look after my child for two days and I'll look after yours for 2 days so we both get free childcare!' This is money's worth as you would have to pay normally for childcare (I think).

No, the above should be allowed now.

I think it means you cant pay an unregistered childminder in choc/groceries etc.

Flipping that you cant pay a 'friend' in childcare vouchers/high street vouchers to look after your child.

So I could swop childcare for 'services' or 'goods'

Is a voucher 'goods' or doing their weekly shop?

Money's worth is usually 'exchangeable items', such as tokens, vouchers, etc. Things that someone can take to a shop and exchange for a purchase.

Doing their weekly shop is not money's worth. Swopping babysitting services is allowed, and is exactly why the amendment has been made in the first place. So swopping 'favours' is fine. You do this for me, and I will do this for you, especially if it is set up via love or friendship.

I would assume those special vouchers that are offered by stores that have a value of about 0.001p are not money's worth either, because the actual value the store has placed on them is negligible, even though it can get you a discount of £5 or 10% or whatever the case may be.

No, money's worth is narrower than that. It does not include vouchers, which makes sense because if you give someone a voucher which they can exchange for goods or services that gives them an equivalent benefit to giving them the goods or services directly.

Nick I am afraid you won't find a statutory definition, like many terms in English law their meaning is established in case law, in this case particularly tax law where the distinction between earnings (which are payments in money or money's worth) and a benefit in kind (which is anything else) is important.

Essentially, money's worth is something that either:

• is capable of being turned into money in the receiver's hands; or
• consists of the discharge of the receiver's debt

Katy don't take this out of context - this exemption only applies to an arrangement between friends, you can't offer unregistered child care services in exchange for M&S vouchers or whatever.

Also note that the position with HMRC is unaffected - if you are carrying on a business with a view to profit anything you receive in exchange for your services is business income. It is worth noting that HMRC would never have considered an exchange of child care between friends as carrying on a business with a view to profit.

The problem is that the relationship between parents at school is blurred

So you could ask another mum to provide unregistered care for
1)Tesco vouchers
2)Gardening work

& now that would be legal (I think?)

Which reduces my potential client base

MrA your posts are always interesting

That's a good point you make Katy. I think everyone agreed that the boundary was set in the wrong place before, perhaps it has been moved too far the other way?

The onus would now be on Ofsted to prove that such an arrangement was not made 'in the course of a friendship between the parents'.

Now I've just looked at the explanatory memorandum which asserts that store gift vouchers are money's worth. I am not sure that is consistent with tax law (where vouchers are not considered as money's worth and are therefore benefits in kind but are specifically 'moved' into earnings by Section 62 ITEPA 2003).

To avoid this problem, let's assume that the childminding is provided in exchange for a load of Tesco's shopping - you tell me what you want, and I'll bring it when I pick the kids up.

It is worth noting the following statement in the explanatory memo, and that the arrangements are due for review in 2012 so any widespread abuse should be tackled then.

8.11 The government recognises the essential role that childminders play in promoting parental choice and flexibility as well as for providing good quality childcare and there is no evidence to suggest that parents already using - or considering using - a professional childminder will seek to
substitute this professional, good quality care with informal arrangements, particularly since informal arrangements would not be eligible for the childcare element of the Working Tax Credit.

But a good proportion of families don't get much or any childcare element, so they are free to use whoever they want

Why is this a big deal? If I want my friend to look after my child and I give her a gift of vouchers or something, that's no one's business and no one but us would know.
Why do people care about arrangements between friends?

Sorry that it takes away from some people's business. But some people can't afford cms, nannies, nurseries...etc. And they are lucky enough to be able to make reciprocal arrangements with friends... or their children are just happier that way and it's ideal for both families... this isn't something that everyone is going to all of a sudden go out and do. If they wanted to do this, they'd already be doing it (but keeping it quiet after the police women thing, of course.

People shouldn't be able to use unregistered cms that they don't know - but good friends are a different story.

I use a registered cm, by the way. But my friend used to look after my ds. For a whole year! I had to go back to work early and no way was I going to send my little baby to someone I didn't know extremely well (even if it was an ofsted registered "outstanding" cm). ds is now a bit older, I realized mixing friendship with childcare can actually hinder a friendship (different story) and I'm happy with him with my lovely, lovely cm