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??

What's startlingly obvious to me is that discussions about tax policy are more interesting when people are prepared to talk about the policies proposed rather than fantasising about the evil soul of the person proposing the policy.

Why would a system like the Swedish system turn Britain back to the time of a fictional TV series?

Nobody has suggested that this small change to the tax system would end the UK's depression or that it would revolutionise the economy. Just that it might be a good idea.

But apparently we can't borrow ideas from successful neighbours unless we copy everything they do, because otherwise it is just an unworkable "bolt on" (and we don't need to know ANYTHING about their tax system to declare it an unworkable bolt on)

Cogito - I'm not 100% against the policy and do think it's worth discussing, but I also think its worth discussing what kind of jobs the government wants to create.

A job is a job, but the kinds of jobs that create economic growth are the ones where productivity can be improved through innovation and technology, and where we can trade high value goods and services with other nations.

The thing about domestic service and care jobs is that they don't get that much more efficient over time, and you can't build a world class economy on them. So a nation with a high % of people doing those jobs and few working in a tradable sector, creating tomorrow's industiesr is going to struggle to compete and maintain high living standards, no?

It's not that these jobs are demeaning but they don't bring with them any measure of power and escalating skills for the working class, in the way that skilled manufacturing does. Yes a jobs a job, but I don't think many high earners will be saying "William do you want to be a cleaner or follow daddy into bond trading, either is good."

I don't think it's complete paranoia to wonder in whose interests the tories are acting when, having decimated the British manufacturing industry the last time they were in power, they now suggest domestic service as a job growth area.

Labour too bought into the idea that the country doesn't need to make anything apart from financial services, and I think the trickle-down-through-benefits model has been equally corrosive.

So yes, I think the policy might be a good idea, but don't think 'a jobs a job' when it comes to industrial policy.

"But apparently we can't borrow ideas from successful neighbours unless we copy everything they do, because otherwise it is just an unworkable "bolt on" (and we don't need to know ANYTHING about their tax system to declare it an unworkable bolt on) "

athing why do you keep picking up on my posts?

Looking at the entire integrated different tax regime of a different country and picking out two occupations to subsidise, while ignoring the rest of the tax regime and teh other occupations ie childcare, is bolting it on.

Your latest suggestion is that for fairness this only be offered to lower income families, and that other things work on that basis so it should be fine to administer.

1. That would make it an entirely different proposition to the one suggested - a tax break is a tax break and would need to be via HMRC. There is a problem there are HMRC do not work on family taxation
2. Your idea it would be for lower income families only. Well that is a different thing entirely. Even with the break are lower income families going to be hiring cleaners and gardeners? Given how people are struggling. Will this really stimulate employment?
3. Your idea it would run via the current system for this. I assume you are talking about the tax credits system? That is not a tax break then, it is a different mechanism and very different to what other countries do.
4. Tax credits are being abolished

You keep picking out my posts and being quite aggressive, then when I ask you how exactly this is going to work and point out what I think are some fairly fundamental flaws you say I am "illogical".

Then go on to say things like "What's startlingly obvious to me is that discussions about tax policy are more interesting when people are prepared to talk about the policies proposed rather than fantasising about the evil soul of the person proposing the policy." which given the target of your other posts I assume is aimed at least in part at me. I have not mentioned evilness on this thread but been trying to find out what this means, whether it will work and how they are going to do it. ie talking about the proposals which you say is what you want. If you don't like what I'm saying then fine but FGS stop hurling random accusations at me and the failing to explain how on earth you think the government are going to address the fairly massive hurdles people are talking about, and how you think this policy is going to make money for the government.

I mean this comment "It would be pretty easy not to offer relief at the higher tax rate if that was felt to be unfair, that already happens for some things."

Tell me which things have this feature of no tax relief for higher earners
Tell me how much money you think will be generated if higher earners are excluded from this policy
Tell me how you are going to link it to families when HMRC do not do this
Tell me if you are bot offering it to HRTs how you are going to get around the problem they have with child ben about wealthier families getting it and poorer families not
etc etc

Just accusing people of being illogical and talking about evil is not a good argument. You want to talk about policy - fine - tell me how this is going to work, in practice, in the UK, and how you think it will generate money.

"So yes, I think the policy might be a good idea, but don't think 'a jobs a job' when it comes to industrial policy."

Agreed.

It's just tinkering around the edges. I'm just interested in whether it's good tinkering or bad tinkering.

My lefty prejudice makes me keen to find out more about successful policies from Sweden, and I'd love to hear more about how something like this might work (or fail) here from someone who understands the British tax system.

I've not yet read any tax experts saying this is a bad, or unworkable, idea.

If it's easy to implement and has no significant cost implications, but potentially positive effects on our dying economy, then it's worth considering.

Certainly I agree with claig that round after round of QE going straight to the banks is just bolstering bank balance sheets and precious little else.

I would support far more radical stimulus spending, but while that ain't happening with Austerity Osborne in charge, I'll take what's going.

athing I have just listed at length the hurdles and how this does not fit into the current tax system.

In fact I have done so repeatedly. You just keep ignoring them.

You don't need to be a "tax expert" to understand the basics of how our tax system works - you simply need to be a person living here who has had exposure to it. The fact that HMRC operates at an individual level is basic and surely everyone knows this especially given the hoo-ha about child benefit. The reason for the hoo-ha is that child benefit is run by HMRC and they cannot administer it as they simply do not have the required info (family info). It has been all over the news for about a year. The other reason for the hoo-ha is that the (unworkable) theory means that families with more money will continue to receive it and families with less will lose it. There has been a huge outcry - again it has been all over the news for months - and yet you suggest applying the same mechanism to these tax breaks. Why? It seems fundamentally unfair to me. Can you at least explain why you think that is a good idea?

re child ben from here

"The LITRG argues that whatever approach the government takes, it will be fraught with difficulty because:

There is no definition of "household" in tax law
It is impossible to know who is a higher-rate taxpayer until their income for a whole tax year has been assessed
Child benefit operates entirely outside the tax system
This would make it very hard for the government to introduce a "tapered" policy whereby it withdraws the benefit gradually - rather than suddenly - as someone's income rises into the higher-rate tax category.
The LITRG argues that the new system would also undermine the independent taxation of married people, who are responsible for their own taxes and not of their spouses."

Just came up in a quick google but I read a more extensive article about it.

"It's not that these jobs are demeaning but they don't bring with them any measure of power and escalating skills for the working class, in the way that skilled manufacturing does."

And, in the absence of adequate skilled manufacturing you're arguing that people should stay home and do nothing just because cleaning or similar doesn't offer a measure of power? Work is work. There's no such thing as dirty money and there's no point sitting back waiting while the world turns to match your aspirations.

My ex-MIL has worked as a cleaning lady a few hours a week for the past 35 years. She started it when her youngest went to school, to bring in a bit of extra income, but has always worked cash-in-hand.

When the cheques were introduced, both her sons tried to encourage her to join the scheme, but she refused, worried that it would tip their household income into the taxable range (her husband worked full-time but in a low-paid, menial job and they didn't pay any income tax).

They are now both in their 60s and her husband retired several years ago. They can't afford to lose her income (as they're in debt up to their eyeballs, but that's a different rant), and because she has never made pension contributions, that means she can't afford to retire!

It also means she has no sick pay entitlements, so they got behind on payments when she had an accident recently and broke her arm. And of course she gets no holiday pay, so she works 52 weeks a year, just to keep afloat.

The cheque scheme would have made such a huge difference to them in the long term!

But it doesn't have to be complicated surely. You (being the govt) "sell" the cheques for one value, and redeem them at another. You insist that certain categories of work are paid only through this scheme. You ensure that agencies give proper contracts for the work after a qualifying period. I don't think you have to even think about what someone's personal or household income is on the demand side.

Just to give an example: An hour's work costs £10. You sell the cheque for £7.50. You pay the agency the balance (what ever that might be - say £20), and they manage the tax, NI payments, holiday pay, pension etc.

The buyer gets a cost advantage, the employee gets protection and job contract, the govt gets additional tax payers, and a reduction in benefit payouts and pressure put on the black economy.

cogito - Himalaya has answered your point far better than I can. I don't see cleaning as 'demeaning' - I've worked as a cleaner, actually; have you? - but nor do I see increasing the numbers of cleaners as the way to improve our economy in terms of global competitiveness. To improve the quality of life for everyone in our country - not just those wea;lthy enough to afford the cleaner - we need to invest in industries that can stand on an international stage. By definition, cleaning someon's house in Kensington or wherever cannot.

Unless you see the potential for growth in our country being by subsidizing cleaners, who in turn, spend their newly acquired wages on themselves employing a cleaner...and so it goes on...?? Can't see it as a long-term strategy myself.

Or do you fantasise idly about a world in which I clean your house while you clean mine, all happily subsidized by the UK taxpayer? Hmmm.

Actually, i suspect the unwritten implications of your post cogito is that some of us are more equal than others and that therefore we as a society should subsidize cleaners for the 'important' people, so they can get on with their 'important' jobs, while the rest of us proles should be jolly happy to be allowed to clean up the crumbs from their tables.

Maybe I'm wrong, but that is the impression you give.

Thanks vitamin and Porto :)

Your assumption is both pompous and incorrect breadandbutterfly.

All the time I hear how it's a mistake to sack public sector workers (paid for with taxes of course) because their wages get spent in the economy, they pay tax into the exchequer, and this all means the financial wheels go around. So if the suggestion is to give tax-payers a little tax back to employ cleaners or gardeners, I think that's the same argument.

Porto how do you check that the cheques are only being bought by families though? DC does not want to bring this in across the board but just for families, and that is where the complications come in from what I can see.

Don't know about Belgium, Sardine, but here in France you have to register as an employer with the NI people when you order the cheque book, so they know your family situation (as they can see how much child benefit you receive, for example)!

I don't know how it could be limited to families, though - what is the difference between a household and a family? Unless it's specific to people with children under a certain age.

It would make sense for carers with elderly dependents to receive them, though, too!

Agree about carers and in fact just older people full stop, and people who find it hard to manage the cleaning for whatever reason.

That's heading it in the direction of a benefit I guess, though.

Registering as an employer to hire cleaners and things in the UK would be a very big change to the system.

I think that if they are going to do this then they need to think properly about how it will work before announcing it. Otherwise there will just be another child ben style shambles.

Which is why i think the French system works - because it's open to anyone!

And the subsidised childcare vouchers are specific to families with a child (or several) under 6, with the subsidy level dependent on the family's income bracket and family size.

the majority of Carers and elderly people would not be able to afford a cleaner even if was subsidised by 90%. Its an unobtainable luxury as far out of reach as a yatch (yacht?)

Kal, the cheques here are not just for cleaners - I know a few students who go shopping/run errands a couple of hours a week for elderly people living alone and get paid ?10/hour using these cheques.
The students get to earn a bit of money and the lonely old folk get a bit of company and help, so it works out well for everyone!

My mother cared for my grandad for several years until his death. My dad was still working full-time, so they had an income, but it was very limiting for mum, as GD had Alzheimers and couldn't be left alone. Dad had to take time off work if ever mum had an appointment at the dentist or whatever. With the cheque scheme, you pay by the hour, so for a few quid she could have paid someone to "grandadsit" for a lot less than it cost my dad in lost earnings!

cogito - which assumption that I made was incorrect and pompous? That you have never worked as a cleaner? That you secretly fantasise about an Upstairs Downstairs kind of world? That a world in which we are both paid by the state to do each others' cleaning - but not our own! - would indeed be ludicrous, and impact negatively rather than positively on our economy (although I'm not against recognising the ecenomic impact of domestic work, per se, from a feminist perspective, though I'd like to be paid for cleaning my own house thank you, not yours)?

Which of these were you referring to?

I think the difference between public sector workers being paid for by the state and private cleaners being paid for by the state should be kind of obvious, cogito - the clue is in the name.

We as taxpayers pay for public sector workers such as teachers, nurses, binmen etc because they are working for the public ie all of us.

I can see no reason why my taxes should go towards enabling someone richer than me to enjoy the services of a cleaner. This is not a public good, it is a private good. It is not an essential need, like care for the disabled, say, which i don't begrudge paying for of course.

No, if a well-off person, or a poor one comes to hat, wants to employ a cleaner that is entirely their own affair, but I can't see why i should be paying for it.

If you follow this through logically, if David Cameron wishes to eat at expensive restaurants i should subsidise him, because I will be giving jobs to needy restaurant staff...

Oh come on...

Yep if you can afford a cleaner thats fab, but what about the rest of the WORKING class who cant even heat there homes !!!!

breadandbutterfly - Pretty early on in this debate a tax professional pointed out that you wouldn't be paying for it, because the vast majority i cleaning work is currently cash in hand. So if it's tax dodging then and becomes tax exempt in effect nothing changes. Except that if this scheme did come in the cleaner would get their NI paid, meaning a better pension and more security in the event of sickness etc, and there would in all likelihood be more cleaning jobs available thanks to the incentive.

I fail to see how this is a bad idea: it creates more security for cleaners, incentivises the creation of cleaning jobs, thereby creating more net contributors to tax revenue, and costs the government very little in lost revenue.