Tax-Free Childcare - Govt. wants to hear your views

[KatieMumsnet]

Hi there

As you may know the government is introducing 'tax-free' childcare in April 2015.

They are currently consulting on draft guidance and would like to hear your views. Please take a look here, and let them know (on this thread, or via [email protected]) your thoughts.

In particular they'd like to hear your views on

The guidance in general - is it helpful?
Is there the right amount of detail?
Are the right topics covered?
Is there more you'd like to know that's not covered?
Can you pick out the key points relevant to you quickly and easily?
Is the language clear?

The closing date for feedback is 15th December 2014.

Many thanks

MNHQ

This new system will mean we lose out on hundreds of pounds of childcare help. Currently we are able to claim tax credits of £210 for the first £300 of our childcare cost plus vouchers for the rest.

They need to make childcare costs fully deductible against income from dual income families. It's the only fair way to do it. the current system is double taxation and keeps wages low as people are paying from post tax income rather than pretax.

Example 3 on page 16 is patronizing. Plenty of working parents are working a four day week and are spending their 5th day doing chores and taking their child to appointments. To say the mother is taking a day off for her hobbies and non work activites is demeaning. I understand what they are trying to explain but there are better ways to put it. I think saying 'as work is not attended the cost of the 5th day is not eligible and must be paid for separately' is better.

Just come a across this. Could it be promoted a bit, such as being a Sticky on appropriate boards to do with Childcare, Working?

That point about paying your childcare for days when one of the parents isn't working from a different account is going to be fiddly and difficult to police isn't it?

I think each parent should be eligible to deduct half the childcare costs from their pre-tax salary. That sends the right message that both parents are equally responsible for childcare. Then it's up to parents how they juggle and manage - at any one point in time either parent may go down to part-time or study or be a SAHP etc.

Thanks for the comments. We'll sticky in nurseries and going back to work too.

Katie

Everyone with a child has childcare costs. This can be paying someone else to look after that child, or giving up a salary so that a parent stays at home to look after that child. Therefore, imo there should be some sort of tax break for the partner of the SAHP.

I am sick to the back teeth of this Govt not recognising the work that SAHPs do!

How can we find out if we are better off keeping childcare vouchers than opting in to then new scheme? Can we please see a way of comparing this? It seems unfair to ask parents to choose one without giving them the option to see if they are better off.

It implied there would be a calculator for this developed. I'd assume you won't get a choice for long.

Page 7
You could get Tax-Free Childcare for each child you're responsible for if they're:
Under 12 years old

Could this have the eligibility criteria added, or referenced, as for those with children born in Aug it may come as a shock later on in the document when they find that their child is not eligible for all that long whilst aged 11.

Is there some reason for why it is not until the child's 12th Birthday? Would it not be fairer if it was until then, not a set date?

Page 7 (bottom)
This can include care provided at home, in school or another place by a childminder, playscheme, nursery or club.

Rephrase alphabetically:
This can include care provided at home, in school or another place by a childminder, club, playscheme, nanny or nursery.

Or rephrase by location starting with homebased:
This can include care provided at home, in school or another place by a nanny, childminder, nursery, playscheme or club.

Page 26
This can include the net pay of the employee as well aa any PAYE and employer National Insurance Contributions which you may be liable to pay.

What about payroll admin costs? They are a directly related cost to employing a nanny, or are parents expected to use HMRCs online system and not contract the 'paperwork' out to payroll agencies?

Can it be rephrased such that it makes it clear that a nanny is paid a Gross salary?
Perhaps along the lines of:
This includes their gross salary as well as payments made by the employer such as National Insurance Contributions and payroll administration.

Could it include some things that can't be counted?

Perhaps along the lines of:
This does not include children's activities, mileage payments or any other payments that you may incur whilst having a person work for you as an employee.

Page 33
Pay-only account

If a family has 3 children and one child becomes Pay-Only, then can the money in their account be used to pay for the care of the two younger children?

Will the application form ask how much a parents pays for childcare? If they pay an amount for all their children but only some of their children are eligible, can they claim all their childcare cost, or just that which relates to the young children?

Examples shown, such as on page 16 are for if a family only has one child. Can there be more examples for two, three, four children who vary in age, oldest aged 11 at start.

Overall the document seems more aimed at families who have one child. For them the childcare voucher scheme would probably work just as good. It is families who have many children who will benefit most from this scheme in my view, as they will not be limited to max amount per adult but instead will be limited by the cost of childcare. When you have 3 or 4 children your cost of childcare is vastly more than if you only have one child. Some providers charge per child, others are paid per family.

Keyword search of current PDF
Children - 4 occurrences
Child - 59 times

Children needs to occur more, as claimants are more likely to have children, rather than a child. Yes phases like "for each child you're responsible for" will be used so could Children be used more in things like Examples.

Nice to see mention of nannies but agree it needs to be clearer as to what is a childcare cost.

The examples do seem to only have one child in family. Need examples with varying number of children as that may change things such as amounts, using multipltle providers, using same provider but one or more children being too old.

'Everyone with a child has childcare costs. This can be paying someone else to look after that child, or giving up a salary so that a parent stays at home to look after that child. Therefore, imo there should be some sort of tax break for the partner of the SAHP.

I am sick to the back teeth of this Govt not recognising the work that SAHPs do!'

Totally agree TheFairyCaravan