Childcare tax breaks for working parents.

[youarewinning]

Please someone explain this to me? There seems to be a £2000 tax break for families where there are 2 working parents.

So does this excude single working families as it excuses families with a SAHP.

Not just France. All OECD countries. Why are we the anomaly?

Would it not be better to be taxed less if you have dependents rather than have the state shell out child benefit and tax credits for those families.

I just don't understand why governments have to overly complicate everything. Why tax with one hand and then pay out benefits with the other? Our tax and benefit system is complicated enough. I forget how many pages the HMRC tax guidelines are, but I remember reading that it is gargantuan.

Two earners at 30K + 30K pay less tax by far than the sole earner on 60K. Also qualify for CB and the new tax break on child care.

Ihate is right, the UK system is the anomaly apparently.

Presumably the idea is that you need a certain amount of money to live on, make it worth your while working, etc. The tax thresholds take that into account. They're not designed for one person aiming to earn enough for 2 adults. The husband earns enough for himself and then moves onto the higher tax rate as from then on he is deemed to be earning more than he needs to live on comfortably. Then it's up to the wife to earn enough for herself. Rather than giving the husband a better tax rate to allow his wife the luxury of staying at home.

Why should it be a luxury?

Because it isn't necessary. The wife is capable of working and paying tax on her earnings. So why should the husband pay less tax than husbands of wives who go out to work?

Taking the SAHM thing as a luxury aside, if every single SAHM went back to work, where would they all work, what would they all do? What would happen to single people who need to work but have now been displaced by SAHMs? I'm just curious as to where everyone things all these jobs are going to come from. Surely if every wife of every high earning man went back to work, we'd be in a situation where there was more inequality in income as these families would now earn even more than most and pay less tax due to two tax allowances. Surely this would make life much harder for families where no one works as they struggle to find anything. Most of the SAHMs I know married to higher rate taxpayers are highly educated, previously high earning women. Would it not make more sense for the country to try and get one person from every family into work and therefore make that family financially independent, rather than having two high earners in educated families who will then be much better off financially.

if every single SAHM went back to work, where would they all work, what would they all do?

In Childcare

comfitt grin

Would you like to go back to the days when men earned far more than women for the same job, because they had (or were deemed to have) a family to support?
And women had to give up work as soon as they got married, as they no longer needed the money?

sorry, should say . I'm tired!

Personally Dinosaur, that would suit me fine.

I wonder whether living in those days would have suited you as well as you think. You would not have chosen to be a SAHM, you would have been forced to be one. As a child you would have been expected to become a SAHM, so your education would have been given little value. You would have lived in a society in which men were deemed capable of doing anything, and women of doing almost nothing. In which women had very little financial independence, relying for everything on their husband. Who were expected to treat their husbands as a superior being. Who were deemed worthless if they did not marry. An so on.

Why should I not be able to assign my personal tax allowance to anyone I choose?

As it happens I am using it, but there have been years when I didn't and there may be more in future.

If I enter into an arrangement with a spouse (particularly) where we divide the roles in a particular way, why should we not also be able to make commensurate decisions re tax? The self employed put their SAHP spouses 'on the books' all the time...

It's not your personal tax allowance unless you are earning above it and therefore paying tax - that's when the allowance kicks in. It's not like a cash allowance you get as a reward for being a UK citizen. If you're not earning any money, then you don't need a personal tax allowance, you need a job.
Do you think that everyone should have a maternity pay allowance, whcih pays out regardless of whether they give birth or not?

Dino I think you are confusing SAHMs (and SAHDs??) with 'surrendered wives'.

Besides we are discussing the 2014 budget so the social mores of distant decades are not really relevant

NB the self employed who do that are evading tax, which is illegal. A bit like saying it's ok to steal because your neighbour does.

I'ts relevant to the discussion, Comfitt, in that Ihate has indicated that she would personally welcome the return of those payment patterns. How people are treated, by their husbands and society as a whole, is certainly related to how much they earn. If a large proportion of women become SAHMs (long term), then I'm sure we'll see a shift towards far greater inequality between the sexes.

Oh come on, transferable tax allowances exist, have existed.

As I say, the self-employed and the wealthy have all manner of ways of working the tax system to their own advantage. Transferable personal tax allowance for us humble citizens would hardly break the bank or encourage deviancy.

BTW, If ever the vast majority of parents are manipulated or forced into the jobs market, it will cause a boom in (largely pointless) self-employment for the reasons I have outlined above and also because a lot of high-needs children have a SAHP and a lot of free elder-care is provided by SAHPs.

I can't see why an increase in the number of SAHDs wouldn't acheive the same.

achieve

NB the self employed who do that are evading tax, which is illegal. A bit like saying it's ok to steal because your neighbour does.

Not necessarily; hand a wodge of the admin to your partner, pay generously.

Not too impressed by the argument that because the rich dodge tax the government shouldn't bother to be too pedantic about taxing other people. The government doesn't seem to take that view over how it deals with the disabled and unemployed, for instance?
Someone's pointed out that lots of SAHMs are highly educated and could go for the good jobs, which would become harder to get. Maybe getting the best people for the top jobs would be a good idea though? Maybe those highly educated and intelligent women could be making better use of their education and intelligence? Do you need a PHD to look after a 2 year old? Is that a good use of the higher education that, in those days, was provided to you free of charge?

The argument that my degrees and IQ were wasted on caring for under 5s personally always irritated and amused me in equal measure.

It seems to me that intelligence is very valuable in conversing with small children; reasoning; analysing. High-IQ children, in particular benefit from high-IQ carers. Would you support some sort of cut off point based on educational level obtained, raw IQ score, or professional success? Only people below the bar being suitable to care for children? Besides, intellige.nt SAHPs can find ways to find intellectual fulfillment and 'keep their hand in'

As for the tax, the loopholes that the wealthy exploit are not being tackled effectively. It is cowardly and cynical to be making ideological tax attacks on specific types of normally-earning families before addressing the evasion/avoidance of the rich.

Every household with children needs domestic tasks performed, children cared for and money earned. I can't think of anything less desirable than the state intervening in how those tasks are apportioned between individuals.