Abolish tax on nannies or allow deduction on salaries paid to nannies

[absag]

Please sign this petition if you agree with the logic below:

epetitions.direct.gov.uk/petitions/32739

Parents are required to pay PAYE and NI on employing nannies.

British parents shoulder some of the highest childcare costs in the world.

The average gross salary of a full time live-in nanny in central London is £27,000, which includes £9,500 in tax and national insurance contributions.

Because a nanny?s gross wages are paid out of the parents? after-tax income, this effective double taxation means one parent needs to earn £37,000 a year just to cover the cost of the nanny.

Action government should take:

1). If nannies are treated as employees than parents should be treated as employers and allowed a tax deduction.

2). If not the requirement to pay tax on nannies should be removed

I believe that this will be tax neutral as lower childcare costs will enable more mothers/ fathers to work.

Yes I understood what it was about thank you. I also paid all my nanny's tax and NI correctly. I'm not stupid but thanks for infering I might be :)

As I said if we were talking childcare generally fair enough but this petition is too niche.

I agree with KatieM

"In almost every other employment circumstance, you pay your employees before you pay your own tax so you pay tax on the smaller amount (after you've paid out salaries) whereas with nannies you pay your own tax on the larger amount (before you pay out salaries) and then pay their salary."

Isn't that because in almost every other employment circumstance an employee is hired by a company and not an individual/couple?

Are you suggesting taxing households like companies for everything? Or just for employing nannies?

Yes that is why - it's the companies, individuals difference. Companies cannot employ nannies as a fundamental business expense but they can employ chauffeurs...

Katie, you inferred, I implied . I wasn't sure why you were talking about negotiating to pay nannies gross. That wouldn't make any difference to the fundamental issue. Everyone agrees that nannies themselves are taxed and NICed and that someone has to physically pay over that money.

I agree with the idea in principle but politically it'll never happen as this will be spun by the lefties as another Tory idea protecting the rich etc.

And to be fair it's probably not really an urgent priority for the current government who rightly have bigger things to worry about.

My point Margo, and I don't think I expressed it brilliantly, is that childcare is an expense regardless of what service you choose nanny/nursery/childminder and has to be considered as a gross expense. The fact nanny employers are employers instead of customers or "service users" may feel different but the reality is that treating nannies differently from other types of childcare because they are employees and have their tax and NI processed directly by the family is complicated and potentially discriminatory. Why should someone who can afford to employ a nanny for £400 gross per week entitled to a tax break that someone who pays £400 a week in nursery fees isn't? Or that someone paying a childminder £45 a week isn't?

If we start arguing the expense issue then all travel to and from your normal place of work should be tax deducatable (it isn't for employees) and food. Because if we didn't eat we wouldn't have the strength to work. Obviously this is taking to the argument to the extreme and making it absurd but you cannot reasonably argue nannies should be a tax deducatable expense because they are treated as employees if other childcare is not.

Where I live a nanny costs about the same as a nursery place that's £65-80 per day just in case anyone was going "how much???!!".

This is just another petition that is motivated by selfish needs. It is not for the greater good or it wouldn't be so narrow in it's remit.

Now I fully agree with you.

I do think childcare of all sorts should be tax deductable - at least in part. Or heavily state subsidised which would amount to the same thing (and by the way, transport is, even though it doesn't feel like it!). But neither thing is going to happen so we just have to put up with it. I will sign the petition though, because I think it highlights the ludicrousness of a chauffeur being tax deductable and the general issue of childcare costs being a real barrier to work.

When I created this thread I had not appreciated the various other points of view that have been expressed here. The intention was not create a petition "motivated by selfish needs". I have not used nannies yet but my impression is that Nannies are somehow more expensive than childcare (which in my area is very expensive£1400 p.m. of £16,800 p.a.) due to tax.

I understand Kate's logic that if you take the theory to the extreme there should be a deduction for everything from transport to food to TV...

However, childcare costs are so prohibitive (in what ever form) that they act as a big barrier to work ... so probably the petition should be made more broad based...

Do a petition about giving tax breaks for childcare or even just making childcare vouchers (and the tax benefits) available to all and not just employees... and I'll be there with bells on :)

I may have been a bit unreasonably stroppy because I get sent loads of these sorts of petitions and it gets a bit wearing. The last one was to make nurseries cheaper and the person who sent it to me who used nurseries was most offended that I wouldn't sign. Again it was just too niche which has all the problems as already described on the thread but also means that if one section of childcare gets help that then has a knock-on effect to the other sections with all the employment problems that brings.

Nannies can be more expensive than other forms of childcare, but not really because of tax.

If you have one child, and pay a nanny £10 an hour, it is expensive - especially as you could maybe pay a childminder £4 an hour. However if you have 3 children, you'd be paying a childminder £12 an hour, so £10 an hour for a nanny is cheaper.

I don't know if I close this petition but will probably raise a new one containing suggestions to make child care less expensive ... but before I petition anything I will expose it to this forum to get ideas from everyone :-)

Totally agree it should be tax deductible. Especially since certain employers offer 'salary sacrifice' childcare vouchers that are, in effect, a form of tax deductible childcare (but generally only if you use a nursery, as opposed to a nanny).

If you work any kind of hours that fall outside of the usual 9am-5pm, or even 8am-6pm, then you're screwed in terms of finding childcare at a nursery or childminder. If your employer expects you to work til midnight, at weekends and come in to close a deal at 5am, then you need a nanny.

I think the Australian opposition leader has pledged a very good system if he is elected - www.businessspectator.com.au/bs.nsf/Article/Mums-can-be-economic-assets-Abbott-T858S?opendocument&src=rss - essentially subsidising the use of nannies. It would be brilliant if there was something similar here in this country.

lol