Can we get George Osborne on here to explain why childcare is not tax deductible?

[Strix]

And by "tax deductible" I mean working parents should not have to pay any tax (income, NI, etc.) on the income which they use to pay for childcare.

Scrap the childcare vouchers which result in a pension reduction, and just work out what our taxable income is AFTER the cost of childcare is subtracted.

Childcare is after all a cost incurred for the sole purpose of going to work.

And, it would help keep people in work because it would be more affordable for lower and middle earners to actually go to work.

Strix! Have you made an announcement that I've missed, or did you just slip it into the thread?!

Congratulations. Hope all is well!

I haven't had a proper party or anything to announce it. But, I started blabbing about it a couple of weeks ago.

That's a shame. she was such good value as a poster.

Anyhoooo

Must do a bit more work before I go home.......

Yes, so you can give your money to the childcare of course... but not after you pay some tax!

Strix Of course we should have a low tax, high growth economy. If more politicians and journalists realised that it is not "government money" but "our money" the world would be a better place.

However balancing the public finances is the priority. If you don't balance the budget you end up paying ridiculous sums in debt interest.

I don't think further spending cuts beyond what are planned are possible. So any shortfall in the public finances due to tax breaks for childcare has to come via tax rises elsewhere. And we are too highly taxed already.

Oh I've just seen your happy news Strix, congrats

I don't think this one is a starter, to be honest. Using 'childcare costs' as the benchmark effectively discriminates against those with fewer children and those who are SAHPs. It also rewards those who choose expensive childcare over cheaper alternatives. If childcare costs became tax-deductible then other 'care' costs would also have to qualify or there would be accusations of discrimination against disabled people, the elderly and so forth.

I would much rather that there was a sliding scale, tax-free allowance per child that could be added onto the personal allowance of the nominated parent. Families where both parents are either not working or not paying any tax would be covered by the WFTC or CTC.

PPH doesn't even do too much of that I don't think..... kind of busy these days...!

AP+ w 3 yrs experience and great refs started w us, assured me on numerous occasions when I asked that she was fine, settling in for the long term, very happy etc and then left a note after 2 weeks saying she didn't think she could be happy and sorry she didn't have the courage to say good bye. Left us in the shit big time, dh had to cancel work trip, I was up to my eyes in work and study, etc. Hideous.

So hold on to your reliable nanny strix!

PPH remains v good value sister...!

(must get on w work now, earn those £££s to pay the taxman...!)

Good idea Chil (last words from me....)

Oh, I know it's not affordable for the government right now. The thing is, is not affordable for me either. And I earned the money.

The government taxes me as if I am a profitable business when it comes to childcare. But, if I was a business, they would allow me to subtract my costs from my profits before they worked out my tax. So, why can't I do that?

And if you needed a DRIVER instead of childcare, you COULD deduct it from tax....

(irritating)

(wonders about hiring driver, ESPECIALLY as I still haven't passed my driving test )

Because you're not a business and families don't exist to make a profit. We arguably pay for all kinds of services in order to hold down a job and no-one's seriously suggesting that we can offset car maintenance, a gardener or dry-cleaning as tax deductible.

Your choice of childcare was ultimately personal and presumably, if you couldn't afford it, you'd have opted for something different.

"...and presumably, if you couldn't afford it, you'd have opted for something different. "

Like what? A life on the dole?

Don't be melodramatic. People work and pay for childcare already. Those on lower incomes often get the cost subsidised via the tax credit system. Those on higher incomes pay for their own. Some are lucky enough to get employer-subsidised schemes. It's not a straight choice between 'tax deductible nannies' and 'life on the dole'.

I'm not being melodramtic. I am pointing out the reality that people do not have multiple child care options available to them. I know loads of people who gave up work because they couldn't afford the childcare bill. So they are no longer paying tax. I also know people who hire nannies cash in hand becaue it's the only way they can afford to go to work.

Childcare is too expensive. It is not right that people on average salaries cannot afford to have children and go to work.

People on moderate salaries always have to cut their cloth. Either means living somewhere cheaper, limiting family size, working fewer hours, using grandparents for childcare, or whatever they need to do. The ones on very low salaries get more help. And the ones on very high salaries shouldn't really need our help. The people you know who gave up work... how many of them are on the dole? Or are they now SAHPs?

BTW Paying nannies cash in hand is just tax-dodging and exploiting workers. No justification for it.

"BTW Paying nannies cash in hand is just tax-dodging and exploiting workers. No justification for it."

I agree. But, as you say, they do have to cut their cloth.

I love the idea but a couple of things make it unworkable.

1. It's be a bloody nightmare to implement and manage, adding loads more people to the tax credits system as effectively that would be only way to do it.

2. Lower earners/single parents get part of the cost subsidised by these tax credits anyway, it's be a benefit for higher earners which is rarely a popular policy issue.

3. It would open floodgates for other things to be tax deductible for working, discriminates against child free families etc. How would it work for people who pay parents to look after children? If payable to people without qualifications/registrations with ofsted open to abuse.

I'd be bloody thrilled though!

It doesn't need to be complicated. If I make £2000 in a month and spend £1400 on childcare, then work out my taxes based on an income of £600. There is one additional calculation (subtracting 1400). Not at all complicated.

If I have a nanny, they will know that because she will be registered as my emplyee (and people who haven't registered their nanny as their employee can rightly miss out on the tax break -- now wouldn't that be fitting!)

Any other form of childcare will be have bills bills paid.

Easy peasy.

And tax credits even to low paid workers don't cover all of childcare.

hear hear! Mumsnet HQ any chance of getting Mr O over to anser a few questions?

Congrats to Strix btw!

We'll ask!

I would like to know if George Osborne knows how much it costs to legally employ a full time nanny in London, i.e. how much a parent has to earn to make it worthwhile going to work at all.
Put it this way, you wouldn't have much over each month if you were on an MP's salary...
The figures are truly shocking, and if childcare was tax-deductible, I could spend the money I would save elsewhere, and that might just be good for local businesses etc.