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

Would be nice if it really isn't means tested. Probably some other restriction which means wouldn't help us, though.

I'm looking at min. wage jobs after a 8year break from working for others, and it's hard to cover childcare costs. Even jobs that pay £7-£9/hour I'm only going to net £1-£1.50 per hour, if I'm lucky. Not that I'm qualified for any of them, either, not until I fork out £600+ to get the right NVQs or software training.

definately not in favour if it effects child benefits. i dont use a registered cm but use my cb to pay petrol and costs for my dm to have the dcs. it wont help us at all :(

LilyBolero I agree with everything you said on page five. Where are all these jobs too? Surely a SAHP, whether a Mum or Dad, frees a job so why are they trying to force us on to the production line? DH is just into the higher tax threshold, but knows colleagues who have turned promotions down, male and female, because they would be worse off.

Also very good points raised by Olgaga on page five.

No thank you.

It's another cut disguised as something new.

Get lost Cameron.

Dh has just looked at it and essentially it looks like another version of child are vouchers

Mellie - what exactly has your DH looked at - no details have been released yet?

Free state child care for everyone would simply cost an absolute fortune and the only way to raise the money would be taxation. Still on the other hand maybe if Tesco's and Starbucks paid their share things might be fairer for the rest of us.

Vivienne yesterday on Pm it was suggested changing the rules on pension tax relief for well-off pensioners would cover the cost

It was a think tank man not a gov official, but t was interesting

I've just started a new job with a charity. So far I've never yet worked for a charity that deals with childcare vouchers, because I'm guessing there is an admin charge for the employer. So I'm not holding out much hope of getting vouchers under the current system. DH and I are probably just outside the joint income that would get any help via child tax credits, so we won't get help there. If the new system is to claim childcare costs against tax (up to £2k as suggested in some papers) then given the rise in personal tax threshold, how would that work as a part-timer (me) or for someone who is self-employed (DH)?! At least Child Benefit is simpler... I hope they don't remove that totally while shaking up these other things as then I will be paying to work (ie work bringing in LESS than the cost of childcare - it currently just about balances out).

Sigh.

It is a step in the right direction but I do think that if both parents are working the cost of childcare should be fully deductible against household income. For those families who have a parent stay home, I think they should have an allowance set at 35hrs a week at minimum wage. At least they are trying to fix the problem. It is the first step of many that need to be taken.

Free state childcare would create masses of jobs, regulate all childcare centres to a minimum standard and hopefully ensure its adhered to and would save a fortune in social services and family support as low level neglect and abuse would be either avoided or at least picked up quickly and dealt with as was proven by sure starts success rates.

numptymum just to say I worked for a charity for five years until last year who offered childcare vouchers. I'm sure you're right that there may be a fee or administrative burden that puts off charitable or small employers but I just wanted to highlight that not all of the third sector opt out.

birdofthenorth / numptymum - me and DH both work in charity/community sector but while bigger, UK wide charities do tend to offer the vouchers, the smaller, local organisations don't. I find the cost of childcare just for one DS hard going, and with DC2 on the way its only going to get trickier :(

Considering the (poor) job they do running schools and health care, I perfer the government (any government, not just the current one) keep well away from my childcare.

What we need is financial means for hard working (yes I mean those who undertake paid employment in addition to their parental responsibilities) people to make their own childcare decisions as appropriate to their own family needs.

If we allow people to deduct their childcare costs from their income before tax is calculated that would be simplest and fairest. And, obviously, in the case of one parent working and the other staying home, the amount could be deducted from the income of the parent who is working.

I've seen done shocking private nurserys, schools and hospitals. On the whole government run facilities are usually far superior in terms of compliance with health and safety, less focused on profit.
The government run nurseries wouldn't be forced on anybody but if you need or wanted to use them, they could be available or heck how about a voucher scheme. Oh wait a minute

"On the whole government run facilities are usually far superior in terms of compliance with health and safety"

Really? Can you back that claim up with some evidence/examples?

I think it would be better to give parents the choice of who looks after their children. If a nursery is not performing, leave. When they lose their business they will either improve or close.

We need both. A lot of us know the state does things badly and the private sector very well but let people keep their choice. An unregulated daily nanny for your 3 under fives who works in your home (which is what we had) is absolutely find for most of us and you can get some really good people.

There is the wrong perception among some on here (and see telegraph article on sahms today) that this "childcare tax break" is somehow being given to placate for lost CB. And this is why sahps feel hard done by. This is fallacious for 2 reasons:

1. The new policy would replace childcare vouchers and childcare element of working tax credit. The tax saving would be similar to what is currently available through vouchers. So working parents are not being given anything extra. I don't know, but I suspect the flat £2k tax free allowance is less than lower income workers currently get through childcare elt of WTC. So this policy is actually a CUT to lower income working parents! And does not help middle income working parents any more at all.

1. The working partner of a sahp would still be able to offset the 2k tax free against childcare. It is unclear whether it would be 2k per worker, per child, or per household. But 2 working parents should get more tax free allowance for childcare, this is only fair.

I agree that CB should be to reward and help those who raise children no matter their working status/income but this is a separate issue from helping parents go to work by allowing income tax breaks for childcare.

You can leave a government run nursery or school for that matter and if enough people vote with their feet then they do indeed close.

xenia
We are now paying a marginal tax rate of 72%. Every extra pound dh earns, we give 72p back to the Government. 50% was seen as being too high a rate for super rich, but 72% is seen as being ok for middling families.

I have to type and run but I lifted this directly from the DWP website from the FAQ page regarding the new Universal Credit which is coming in to force. Just some extra food for thought.

"What is happening about childcare?
Support for children within Universal Credit will be provided in the form of a child element. This will be included in a claimant?s Universal Credit award where they are responsible for a child or qualifying young person that normally lives with them. The child element is comprised of two rates; one rate for the first/only child and then a reduced rate for second / subsequent children.
Universal Credit will provide more support for childcare costs. Under current tax credit rules, support towards childcare costs is only available to parents who work more than 16 hours per week. Under Universal Credit, this requirement will be removed and support will be available to parents regardless of the number of hours they work. This will provide an important financial incentive to those taking their first steps into paid employment. It will mean that around 80,000 extra families will be eligible to receive support through childcare.
Universal Credit is expected to be particularly beneficial to lone parents, including those who wish to work a small number of hours."

This is for out of work as well as in work parents so has some relevance.


Not sure where the extra numbers came from. Apologies.

...some relevance to this particular debate.

"You can leave a government run nursery or school for that matter and if enough people vote with their feet then they do indeed close. "

That is only true if parents have the freedon to choose whether to use their tax break/vouchers/etc. wherever they so choose. If state run nurseries are set up and only those nurseries are accessible, then parents can't really leave them.