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

If tax breaks for over 5s childcare (currently available through vouchers) are scrapped in the new policy it will be making it HARDER for both parents to work full time, harder for women to continue a career after children, it will be achieving the opposite of what they are saying it will. I'm fuming!

It's not even more generous than the current entitlements! How have the papers not picked up on this?! All this is is universalising the system without helping working parents one iota more (& if true about cap at school age, is cutting help)

I may be cynical, but is this a way for the government to stop people using childcare vouchers to reduce their taxable pay, I.e. a way to push more families into the bracket with reduced or no child benefit?
Just saying.

Can't help thinking that all this 'ooh, you'd better give up your child benefit, you don't want to be caught in the nasty self assessment system' talk, is coming at the wrong time of year.

"Sorry HMRC, couldn't get my form in on time, I was getting stressed by all this talk of how complicated it would be!".

What happened to 'tax doesn't have to be taxing?'.

We must never return to transferrable allowances. Women fought for years for separate taxation and separate rights to own and keep and earn their own money.

Childcare full time for 3 children under 5 costs around £20k to £30k gross cost so about £50k of before taxed income in the UK. £2k is only going to help pin money second earner men/women who play at work.

I would much rather abolish all child benefit and tax credits for simplicity and have a very low flat tax.

I can't comment on this proposal because I can't find any details of it.

I would like to comment on the attitude that seems to be prevalent to parents who look after their own children during the working days. I think of myself as a Sahp, however I do also work freelance and so earn a relatively small amount annually, but below the tax threshold. I do this round the time my dh works. I may not be technically 'working' most of the time, but I tell you what I do work fucking hard all day every day at physically demanding work caring for small children. I actually work as hard as many in paid roles doing the same thing, ie childminders and nannies. Yet by some on this thread and by the Govt I seem to be viewed as some kind of shirker! The research evidence suggests that for a parent to care for their own under fives is one of the best options for their development that helps them be school ready, empathetic and grow into decent citizens. In my view it should be encourage and supported for all, not just a lucky few who somehow struggle to afford it. I feel most sorry for those on lower incomes who would like to care for their own children but cannot afford it. FGs we should be supporting parents.

My dh works extra over and above his regular job to earn more money because in his position with this qualifications this is currently easier for him than me, yet he loses 40% of that in tax, and now our cb has been removed too. He faces a pay cut later this year that will take him under that threshold and will likely cut back his other work so we can receive more cb, as it's not worth him doing extra for next to nothing (we have 4 dcs).

All I see is some Tory ideal about as many people as possible working (sahps and the child careers they will need to employ when they go out to work) and opinionated feminists who don't value the work of caring for children and think we should all work even if for next to nothing take home pay so we nearly never see our own children, just because that is the feminist thing to do. They can both fuck right off. I work hard, I paid tax before I had kids and will do again once they're all at school. Dh pays plenty of tax. We both work hard and our children are well cared for.

When we started our family cb was universal and there was a manifesto commitment for it to stay that way. Why would we expect it to be retrospectively taken away?

As someone who is going to lose out on CB, and as someone who is self employed ( therefore been previously unable to benefit from the childcare voucher scheme), I am keen to see the detail of these proposals.
Personally though I just wish they had left CB alone, and the 2 proposals for CB and childcare schemes do seem to be more complicated than they needed to be.

Inmysparetime - we are doing exactly that with the vouchers DH gets although its only half the amount now he got a better job with new employers. What is really annoying is that he is still using the same voucher provider but because he left one company scheme and joined another, he got clobbered with the loss of the £243k amount. Still, £124 is better than nothing.

Glitter there is no point trying to make this thread a sahp vs working parent thing.

This thread is not about the child benefit changes which do affect single earner families perhaps unfairly but about working people being able to deduct childcare costs from pre tax income.

Whatever your opinion about feminism and "what is best for children" surely you can see that it is fair and makes sense that a household where both parents work should receive (more) tax benefits for childcare as it is a necessary cost for them to go to work?

Does it really matter whether you are a SAHP or paying for child care? Whether you pay for childcare, reduce your hours to fit around school, take the 'mummy' career track or take a complete career break having children is expensive. I think most people just take the route that seems best for them at the time. Whatever we do we all loose money.

And by 'we' I am talking about women, as it is still women who are generally expected to curtail their career prospects/take the nursery bills out of their salary/stay at home/be available to attend PTA meetings/arrange flowers for the Big Society.

I think the main reason this policy is such a mess is because the government think of Child Benefit reduction as taking coffee money away from silly women who are too loud in Starbucks and in return we get some half arsed ill thought out rushed policy that doesn't even have proper details that coincidentally has to be announced on the same day that CB is taken away, a bit like a bunch of flowers from the garage because the silly women won't know any better.

The most chilling thing is that that the government assures us that they haven't run out of ideas yet...

I save more than that in tax now with vouchers AND can use them til DD is 15. Therefore it will help with after school care until she can look after herself.
So not only do I lose my child benefits I'm potentially losing out again. Kicking working mothers in the teeth Dave the Rave.

Madame you misunderstand me. I'm not commenting at all on parents who choose to have someone else care for their children. I'm talking only about those of us who do not want this for our preschool aged children. It is not a frigging competition! It does not need to be one against the other .

Xenia wrote
""I would much rather abolish all child benefit and tax credits for simplicity and have a very low flat tax.""

I can see how on the surface this would suit a high earner with little need for public services
However, I'm not sure how it would work for most families, as most people's needs far out-strip their capacity to earn in their child rearing years. So, you would either need to ensure a living wage, where even lowly paid workers could support their children from their earnings (not likely) or accept that a good number of children in our society would grow up in absolute poverty (not nice).

As someone who is so comfortably off, do you really want to live in a country where children go hungry? Are you sure you'd feel safe and happy in a country like that?

What a mess this all is! Clearly what we need is a proper integration across taxation and benefits systems.

It has to be said - tax relief would possibly be fairer than vouchers, as only those with employers who bought into the scheme were eligible before.

These changes - if they happen as described - WILL price me out of the job market. £2000 is less than I currently receive under the voucher scheme and will cause us serious financial difficulty, if I wish to remain in my job. How foolish of me to waste so much time and money on my education and attempting to remain in my profession after having my one (and only) child.

Do we definitely know it will be capped at 5?? Or are we all getting worked up unnecessarily? (I agree if that is the case, I'll be out there protesting with everyone else. But I've not seen anything stating this do far?)

Stripey, the principle behind my suggestion is that if you get the country moving agaqin and good business people flocking here because we harmonise tax/NI and capital gains tax at 20% is that then business takes right off and there is loads of money for the poor. It is not a philosphy designed to ensure I pay less tax particularly at all. Every time tax rates are lowered the tax take goes up and the country thrives.

Iain Duncan Smith was very good on Today on Radio 4 around 8.11am this morning - an item very much worth listening to with lots of statistics and in particular the programme made the point that Labour made benefits claimants of 90% of the population who have children through tax credits which made people very dependent on the state.

There seems to be a general misunderstanding of the amount saved under the current childcare voucher scheme. Even if both parents claim, the tax and NI saved is less than £2000 (although if one or both is higher rate and starting claiming before the reduced monthly limit came in, it comes to just over £2000). This policy is up to £2000 per child.

Xenia IDS can't get his sums right channel 4 news blog here with full figures. Please don't hold him out as someone sensible in the "welfare debate".

This new announcement smacks of emperor's new clothes... £2k sounds great until you realise that actually it's likely to be less than the voucher benefit, and is likely to mean that parents of kids aged 5-15 will lose out compared to the current system.

Mumsnetters as MP's sounds an excellent idea though! Surely we'd be better at running the country than the current lot!

merrymouse "tax doesn't have to be taxing" ... It's not confusing if you're a big US company and you choose how little much to pay starbucks

I actually think it's more sinister than that merry. It's about the Tories pursuing a policy of welfare reform which involves withdrawing state subsidy for anything other than the basics - pensions, health, education, and a basic safety net of out-of-work benefits.

The only reason they haven't completely withdrawn tax credits completely is that the system subsidises business and the low-paid service industry, allowing employers to cut wage costs to the minimum.

It's the same with housing benefit which is a subsidy to landlords, rather than impoverished families.

As far as the Tories are concerned, there should be no subsidy or benefits for anything at all above the bare minimum. When they talk about "scroungers", they don't just mean "career claimants". They mean all claimants of any benefits other than pensions. This reflects the view of the Tory hardliners, their core vote, who believe that everyone should be completely self-sufficient.

It boils down to having the lifestyle you can afford without any state help - and as far as they are concerned, having children is a lifestyle choice.

Xenia I have to say I don't really buy the wealth will flow if tax is low argument... but irrespective of that, a country would no redistributive system doesn't seem possible to me. It would mean that those with the highest needs would need to earn sufficiently high wages to cover their immediate costs - or the children of cleaners and nursery workers would starve. It would be good news for cleaners though, as their wages would have to rise to £30k - and once their children were grown they could live so comfortably... but bad news for me, as I would no longer be able to afford a cleaner

I don't tbh, see what's wrong with 90% of parents claiming a benefit. What does it matter? Surely it is fair and just - that during the heavily resource intensive period of raising children - that society should chip in and help parents out - as children (raised well) are a benefit to all society?

And the alternative, as described above, is to ensure that everyone earns sufficient to meet their immediate needs - and that is unworkable.

People forget that we are all dependent on collective services (like universities, health service, schools, police, fire service) - and that is a good thing, not a bad thing.

There is already a problem with people putting off having kids or not having them due to not being able to get on the property ladder. If the huge cost of childcare is not better subsidised for working parents, then more people will choose to have less or no children. Then we will have a birth rate crisis and not enough young people to fund care for old people (and everything else)

I can't afford a second child due to cost of childcare. My dd is nearly 8. Childcare for her so I can work full time plus a day nursery place for a baby would cost me over £2000 per MONTH

NC for the new year etc but a regular poster and lurker.

I'm fed up with the way the government (either, both, all three!) seem to have so many agendas. Yes, I know it's about winning votes, but fgs can't they just agree and get on with the programme of revitalising the economy, upskilling its people and generally rewarding hard work?

Like some of the other posters, I'm fed up with the fact that it's the squeezed middle (and it's anyone really, from 20K-50/60K) that are hurt. Yes, 20K is 3 times less than 60K but those on 50/60K are still not minting it at all. AT ALL. Can't they bloody listen to us for a fricking moment?

We have careers and we want to work. It's such a laugh that we supposedly went to university or have tonnes of experience in the area of work that we do, and yet we end up not having any money left at the end of the month. and No, it's not because we frittered it away in the sale; it's not because we've been shopping extensively at ocado/waitrose (heck they are also replicating the 3 for £10 meat deals); it's not because our children all have designer clothes; it's not because we all drive new cars that cost £30k or more...

my childcare bill costs £800/month (of which £243 is taken out as a voucher); my mortgage is £700+; my elec and gass is £100; my council tax is £150; my afterschool clubs/swim/tennis cost me a significant amount. We don't have grandparents that live nearby (and even if they did, they still work so we can't rely on them for childcare and I wouldn't want to anyway). We are thankful that yes we still have a roof over our heads etcetc, but we've been shopping at Aldi/Lidl (thanks to MN who've shared lots of gems about those places - until recently we only had one of those stores nearby), we've NOT been eating out, we've passed on attending plays/pantos because it's too expensive, and we only have 2 kids.

I'm sick of hearing that free childcare places will be offered to 2 year olds from poorer families (that's a good thing but how about the rest of us? What's poor? I don't have sky tv!)...

They should first create jobs, make the UK an attractive place to set up shop (doesn't matter what sort of shop - industries, universities, retail etc) that will bring more job opportunities. With that, we the people in jobs can then spend more money that we've earned on stuff (not just food), and so on..

argh. I've just paid one credit card bill yesterday; I now have to wait a couple of weeks before I can pay the other one. And no, it's NOT just christmas shopping that's made the bills higher; it's EVERY MONTH...

Currently get £1200 worth of childcare for £1100 due to tax savings made using childcare vouchers. Measly.

And that is per MONTH if unclear!

Have any of the actual details of this been released yet, or are we still just being told that there will be additional investment in child care to help 'working mothers' ?? Is it Thursday the government are supposedly meeting to firm this up?