New childcare tax break to be announced by the Government today - what do you think?

[JaneGMumsnet]

David Cameron and Nick Clegg are due to unveil new childcare plans in a joint press conference today, with further detail expected to follow next week.

According to reports, families could be entitled to claim up to £2,000 per child every year from their tax bills, to cover the cost of childminders and nurseries as part of a new government scheme to help families.

The new measures will not be means tested, and will replace the current voucher and allowances scheme.

We'd be interested to hear what you think of these proposed changes, particularly in the light of the changes to child benefit which have been implemented today.

Thanks,

MNHQ

I guess it depends on the detail and how much better off we will be

I'd rather they didn't muck about with child benefit.

It's a smokescreen to take the attention off the changes to child benefit, which, lets face it,is only a matter if time till they lower and lower the salary threshold until it becomes means tested [cynical emoticon]

Well, that's less than the current voucher allowance for 2 adults, assuming you are claiming for 2 children. So I'm not impressed.

It does make sense to have an allowance per child (are they going to restrict it for larger families though, like child tax allowances?). But it's nowhere near enough. £2k could be just 2 months worth of nursery fees for a full time child.

I would rather have vouchers than have to claim it back at the end of the year.

Why must they mess with systems that work to replace them with systems that are harder for the average person to do?

I think it is a really good idea - and I say that as someone who uses no childcare and will lose CB.

So is this only for women then? I don't work, full time student, DH currently claims the maximum in childcare vouchers. Can I transfer this to him instead?

Er, this is less good than the current offer if you have one child. I started claiming Childcare Vouchers in 2010, at the maximum £243/month from my gross salary - that's £2916 pa (tax saved £933). DH (Higher Rate taxpayer) only got round to claiming just over a year ago and so he gets £1484 pa (tax saved £623). Until today we also got CB = £1050. Total upfront saving/benefit = £2606. After tax charge = £1556.

DC2, due September, will not materially change the above figures, apart from that we will claim second child rate CB and pay it back in DH's Self-Assessment. Total upfront saving/benefit to us will be something just over £3k.

If you put childcare costs purely on the parents' tax bills, the saving on Employer NI disappears. The payment of the voucher during subsequent periods of maternity leave will presumably also disappear, because the income earned to offset to tax will be reduced.

Rubbish, in my view. And I also strongly disagree with the relaxation of monitoring and ratios for carers:children, especially in the early years.

it won't help people with disabled children as child care is more expensive

Difficult to know if its good or not. It says up to 2k per year per child. So could be less than that. If I could get 2k for each of my children (we have 3) part of me thinks brilliant, while another part thinks that not only would that ne highly unlikely it would also be inappropriate.

At the moment we do maximum salary sacrifice, so roughly I reckon we save about £100 per month for a higher tax payer and half that for a lower rate payer, so for us roughly £150 per month or £1800 per year. If that is way out, please correct me. If the new deal saves me much less than that, I will be working to pay childcare. Not really what they are allegedly aiming to do.

I will watch this carefully. Having lost cb, I don't really want to end up bringing home less than it costs to work. I do want to maintain my career, but the existing costs (stress, guilt, less time with kids etc) is already high and this could tip the balance into becoming unemployed. In my line of work, being out for more than a year is career ending.

Just seen another report that stars its only for children under 5, don't the current vouchers help with 5+ as well?

LovesBeing - currently vouchers can be used to pay for any qualifying childcare with the right kind of registration - so after school childminder, various summer clubs etc. I think up to age 16 although you might struggle to spend the whole amount once they're in school.

Until the details are announced we won't know what they are really proposing/going to do. Will it be any better than the childcare voucher scheme? Will it be available for everyone regardless of the form of childcare they use (childcare vouchers in England can only be used for Registered forms of childcare)? As ever with these things, until all the fine print has been read we will not really know if it is a good thing, or a bad thing.

Depends if you have a baby and a teenager you could use the vouchers to cover all of the baby and none of the teen. I'm guessing that can't happen under the "new scheme"

Why is it only for working women? This is the 21st century, there are quite a few men involved in childcare and families these days!!! Bloody Tories!

If it is for children under 5 that it is another cut in my view, as a parent of school age children grrrrrrrr

LexyMa that's what I thought.

So breakfast clus, afterscool clubs and school holiday schemes wouldn't be covered.

crochetcircle bet it will go to whomever claims the child benefit

Is this being announced today? Fun! What's the betting that it's another way to screw families over.

I want to know why they are taking away an easily implemented and simple child benefit system and replacing it with ever more complicated systems of tax breaks and clawing back of benefits etc.

Yes, it is slightly unfair that there are people earning £££ and receiving child benefits, but I would like to know if this increase in bureaucracy will actually save the country money.

It would be far fairer to leave the CB system as it is. I don't use childcare so the tax break is useless to me.

What's happened to cb?

So this is not means tested which means people can be on 50 grand each, still getting their child benefit and now get an extra 2k a year back now from this too
yet people with one earner on 60k, so an overall household income much less, and paying more tax too, will be getting nothing
this is a load of rubbish to me, how is it a new scheme to help families when families with a stay at home parent seem to be penalised

I think it would be nice if, for once, they would consider those of us with older children for a change. Many of us are in a state of panic about how we are going to afford to support our children through university. I would prefer it if they invested some money in helping with this, tbh.

It would perhaps have suited us, a 2 income family, (though neither of us are on high salaries), and we did actually use the voucher scheme anyway.

Supporting the needs of working parents can only ever be a good thing IMO, making work and the cost of childcare affordable is especially important for women IMO because it always does seem to be the woman who steps off the career ladder with lifelong impact on future earnings.

HOWEVER if this is in place of cb it seems extremely unfair to favour working parents over families where one parent is a sahp, and it would have been better to have left CB intact.

CB could be spent on childcare by working families anyway. And they would have had this in addition to the voucher scheme.

I think the problem would be solved for families with one earner if that earner was allowed to claim the tax allowance of the non working partner. It does seem that one earner families are losing out quite a lot in this latest round of 'reforms'.

This doesn't seem any improvement on the vouchers - quite the opposite in fact. It's a real concern that it's under fives only and that it's so 'woman' focused. The government should be seeking to support working parents. It's so frustrating to have childcare publicly labelled as a 'woman's issue' only. It really isn't!

Pretty typical of this government though - trying to look 'fair' when actually they're screwing you over again.

I agree as well that something should be done for parents of university age children.