tell me I've dreamt this - DC proposing to give tax breaks to the middle classes (who can already afford this) to help them pay for their cleaners/nannies/gardeners????

[ssd]

surely not?

what planet is he on??

There are plenty of people who have chosen not to have children or who are unable to have children. Why should they have to subsidise other people's children any more than they already do? Why should people who ony have one or two children subsidise those with 4 or 5?

I am not saying we should make childcare tax deductible, I acknowledge that the economy is in a mess. I am saying that if this scheme was about enabling people to go out to work it would include childcare costs.

When I was on a low wage and needing childcare, I received 70% of my childcare, not 100%.

I find it fascinating that anyone would fundamentally approve of subsidised gardeners and cleaners, and fundamentally disapprove of subsidised childcare.

It's really interesting how people separate things out in their minds. I see no "it's not fair some people don't have gardens, or don't mind about keeping them tidy, or like to do them themselves, or have had them all paved over".

Funny

The childcare issue is far more complicated. The government appears to want to use pre school childcare as some kind of parental substitute. A social experiment to get all children in the system by giving a few hours of free care per week. I think it was introduced when my dc were in nursery years ago. That tells me that they don't really give a toss about the children of working families. It's an exercise in getting the children out of the sub standard homes to keep an eye on them before they actually start school. Working families, as a rule, tend to provide for their children, socialise them and prepare them for school life and beyond.

Like all government initiatives it was hijacked by the "middle classes" for want of a better phrase. These directives are always aimed at the people with the most need but the people who actually run with them and get the most out them are the wider community. Examples as diverse as 5 a Day or Sure start or even Sesame Streeet in America back in the 70's.

Personally I am all for tax breaks whether it be for childcare/travel to work/ home help ... I also think it would be more effective than the quantitate easing which is hurting people in the process of buying annuities and taking money away from new pensioners.

It has to be a real tax break though, so that you can only reclaim money that has been paid in tax.

Sorry, that was a bit long and ranty

'Actually making childcare tax deductible is such a middle-class preoccupation. Would the gal serving at WH Smith benefit from tax deductible childcare? Unlikely, I reckon. If she's serving at WH Smith on a minimum wage, the chances are she either hasn't got any children or if she has, she's benefiting from free childcare.'

Many mininum wage people struggle with childcare. DH could work longer hours if childcare was affordable. Working longer hours = more money = paying more tax. In other families the second parent could work if childcare was cheaper. Again, in work = paying more tax. Most people I know are on under 20K. The SAHP cant earn enough to pay for childcare so is at home.

Alouise I agree with that.

Why are people thinking the majority of cleaners etc are cash in hand benefits claiments. Produce some evidence for this. All cleaners I know work for agencies. They are already paying tax.
Giving tax breaks to rich people wont affect them nor make them on NMW employ cleaners. And given ppl on MN claim that they are skint while earning 45K, 90% of the population still wont be able to afford a cleaner tax breaks or not.
Its a daft idea. Like I said, tax breaks on childcare would benefit poor and rich workers alike.

No one is saying the majority are but you cannot deny that cash in hand is still rife among people who are not paid through a paye system. For every cleaner you happen to know who works for an agency there are plenty who work for themselves and won't accept cheques or bacs payments because it is traceable. There are plenty of people who don't want an agency cleaner because they don't want the majority of the money going to the agency rather than the cleaner.

This actually solves a few problems, however I can't see it being brought in mainly because if the chippy attitudes that some British people seem to have about home help staff.

Surely the real problem then is across the self-employed sector as a whole then and this is not going to address it at all.

All of the gardeners I know are certainly already in the system. I mean, how many cash-in-hand cleaners are we talking here? It's not going to be great shakes surely.

I think that the self employed sector as a whole is probably a big headache to the treasury. The massive investment in electronic money movement is addressing some of that.

In my little local area there are still a few shops which only take cash or cheques. A couple of hairdressers, a large butchers shop and several take away outlets. VaT won't be accurately returned because of this but what doesn't help is that the banks all charge to accept cash from businesses. So I'm sure that the small business owner has little incentive to bank more than the bare minimum of his cash which ensures the continued supply of untaxed money.

I posted this on a similar thread but think its worth repeating. Iirc hmrc/Treasury do an annual report to Parliment and estimate that the shadow economy (that's mostly cash in hand where people don't declare income and pay the appropriate tax) costs the Exchequer £70bn per year. To put in context, the annual nhs budget is £100bn per year. Everyone thinks that people can't be doing it, but people are, and it all adds up.

That's very interesting Novice. Just think of the tax breaks we could ALL have if people participating in the shadow economy contributed properly.

novice I don't see how this initiative will have much of an impact on that TBH.

If there is a problem with self employment / cash in hand in general then that needs addressing.

TBH it's not gardeners or cleaners who I have noticed have a propensity for cash, but builders, decorators, those sorts of trades.

I just don't think that pursuing a bunch of cleaners on min wage many of whom are prob not earning over the tax threshold anyway is the correct way to go about it.

This smacks more of trying to appeal to a certain type of voter, than seriously trying to address the shadow economy.

I would welcome an initiative to address people evading tax across the board.

And I would welcome a look at whether additional things including childcare should be claimable.

This is piecemeal and not thought through (hmm sounds familiar).

How does the OP know what the middle classes can afford?

Remember, they are already paying far more tax.

Iirc it was just a sound bite not an official announcement, just pre budget posturing.

Although I don't expect anything amazing from the budget. Just the implementation of the doom and gloom policies from last year.

Someone start a thread with some ideas for Budget Day - give Osborne a few ideas.

Why do domestic services deserve a tax break?

Well, I don't think it has anything to do with entitlement, but it is a way for the government to influence behaviour.

They can encourage people to provide jobs for others through a tax incentive. The bonus is that it discourages the grey economy.

How many of these jobs are currently cash in hand? I would suggest most of them.

I don't think Mr Cameron was serious about this initiative, but rather was just being polite to his Swedish hosts. However, if it did happen here, I think I would be encouraged to employ a cleaner. Right now, I can't afford it, but a tax break would make it feasible for me.

I wold love to afford a cleaner! Not mch sympathy for these people ...

SardineQueen, I agree that its not thought through. I am not defending it but more explaning what's probably behind the idea. If it sounds great to their target voters and it reduces the £70bn, reduces the official jobless/benefits number then it will look like a win win for the Tories . Tbh hmrc have had more success doing amnesties for different trades. 'Fess up now and we will be lenient on you. Last I heard there was an amnesty for dentists.

Sardine

"The more I think about it the more it becomes clear that this idea is a load of old nonsense."

You should really get in touch with the finance ministers of all the European countries that implement this and let them in on your astounding insight :o

'This thread makes me ashamed to be a lefty.

Reactionary, envious bollocksology used to whine about a proposal that is used in social democracies all over Europe just because it is proposed (disigenuously) by a Tory.'

The reference to bollocksology immediately brought to mind the question "what is Labour's position on this?"

This is from an article in the Telegraph

'Last night, Labour said of the latest proposal: ?This demonstrates how out of touch David Cameron is about the pressures facing women in this country. He is suggesting tax breaks for people who can afford domestic workers at the same time as he is cutting tax credits for working parents and removing child benefit from squeezed families.

?Is this what he means when he says we are all in it together??'

It is amazing that people who would never vote for the Tories under any circumstances are so surprised that the Tories would consider proposals that might help some of the people who did actually vote for them.

Telegrap h article is

www.telegraph.co.uk/news/politics/9073334/Tax-breaks-for-hiring-a-cleaner-could-save-middle-class-thousands.html

When I first read this I did think WTF?

Having read the thread I do see how this might work as a job creation measure - basically encouraging people to spend more on local domestic services out of untaxed income rather than more on imported goods out of taxed income. I guess it's the kind of tax break you can give people where you can guarantee it will be spent in the local economy.... It's a bit similar to thinking behind local currency schemes (LETS) which come out of the left/knit-your-own lentils rather than the right/upstairs downstairs side of the political spectrum.

But it's not much of a vision of a balanced economy though is it? A few % of people earning massive salaries in financial services, no manufacturing to speak of, massive rationing of the public sector and the rest getting trickle down benefits in the mcjobs and domestic service sector?

On the other hand the vision from the left seems to be the same thing but with a bigger public sector and more generous benefits for those who have lost out from the death of british manufacturing. As we have seen, that vision didn't turn out too well either.

Is it pie-in-the-sky to think we might build an internationally competitive sector that makes something other than financial products? Or is the future of mass employment really cutting each other's hair, cleaning each other's houses and digging each other's gardens?

Athing

How do you think it will work to generate additional income for the country? The positives suggested have been increased tax take, increased employment, reduced benefits bill, moving people out of the "shadow economy" and so on.

There has been a very interesting conversation discussing these points and I can't see that it adds up. The more I think about it, the more I think it is a load of old nonsense.

Maybe you can change my mind by explaining (in light of the points raised on the thread) exactly why this will be a positive step for the UK. I can't see that any of your previous posts have added much to the general understanding of the topic.

Thanks