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.

You do actually.

Obviously not on MN a parenting forum.

LoL yes you're probably right. They don't get radio time though, it probably makes it more entertaining to hear mothers arguing with each other (sigh).

But Twelve how long do you think an average SAHMing period lasts now?

Less than five years, would be my guess. Very wise to keep a toe in the world of work if you can.

If this gov't wants the highest possible proportion of parents in work, it should be supporting the type of activities I've outlined upthread (study, volunteering, CPD), to make the transition from SAHMing to WOHMing easier.

In any case, 20% tax break on say 7 hours (two nursery sessions) per week (SAHM)is considerably less than 20% of full time, 50-55 hour a week childcare. Why are the gov't being so petty over relatively small amounts, unless they are making some kind of ideological point (aka ideological attack on stay at home parenting)

Would be a bit like me complaining about all that money Olympic athletes get in funding...

I'm not disagreeing with you Albanian at all.

It's a new scheme, it;s not even been rolled out yet. It is, hopefully, a step change leap from the current system which ONLY allows parents who are employed by companies which participate in the voucher scheme to claim any tax benefits at all. It would be lovely to think it could be rolled out into something more progressive that included study and voluntary work etc - sadly, given the DWP approach to voluntary work versus workfare etc I doubt very much that will happen.

But that's very different to the SAHP poster upthread who was saying that it was unfair that she had to pay for the afterschool/holiday club costs of her - presumably school age - daughter so she could see her friends.

Twelve

Quite funny, but not really a comparison.

Perhaps you can explain that to the children round here who play with friends at our local youth club but during holidays when its a summer club, the sahp's can't afford to send their dc to play with their friends. However, their dad who pays tax is funding their friends place.
Oh, and its the lifestyle choice family, not paying any more tax than the family with a sahp.
Tell me its fair now and a sahp doesn't need childcare.

I'd be interested to know the delivery cost anyhow. All these nitpicky criteria hugely inflate the administration.

On a related point, the g#ovt really need to decide whether we are all individual tax units or whether families/households are the tax units.

My first comment was related to people without children moaning that they won't benefit from childcare subsidies.

And yes, I do think that families with both parents are working through the school holidays have more need of subsidised childcare in the school holidays than families with a SAHP. There is a poster on another thread who calculated that school holiday childcare would cost her over £700 per week. That is terrifying.

Twelve

I don't share your belief as it isn't always in the interests of children of sahp's.
I also don't believe that one lifestyle choice should be funded and another not.

I appreciate that as a SAHM I don't need a childcare subsidy, as I look after my children myself. The thing that really annoys me about this is the fact that Osborne, Cameron and Clegg are all out justifying why families earning up to 300k a year should be entitled to this subsidy, yet in 2010 that same trio made it expressly clear that child benefit was being removed from families with one higher rate tax payer, as the people with the broadest shoulders should bear the greatest burden. So, I'm left thinking if we can't afford to pay child benefit to families with a single income of 50k, how can we afford to give tax breaks of similar amounts to families on 300k. I really don't see their logic on this I'm afraid.

The wages of parents should be sufficient to pay for childcare rather than relying on the state. Why does the government want to prop up poor employers and the low wage economy?

Couples with a SAHP calculate that loss of earnings will be offset by savings on childcare, if childcare costs are subsidised by taxes this does undermine those calcs. Also it will act as a big disincentive to future parents to SAH. Therefore I think it's fair to say government policy is undermining couples who would choose one as a SAHP.

ihategeorgeosborne

because it is and always has been the policy of a conservative government to make the rich richer and the poor poorer.
What they say and what they do are two totally different things.

Also, I wouldn't count your chickens on this. You have to ask yourself why it isn't coming in this September. Why wait till 2015 if it's such a great policy? My guess is, being the cynic I am, is that after the election, it will all change again. It's not like politicians are renowned for keeping their promises is it? The tories won't win anyway and will labour honour this? I really wouldn't bet the house on it.

Totally agree ihategeorgeosborne. Why take away my child benefit only to 'give' some of it back to families earning up to £300,000??? I chose to be a SAHP, and we are lucky to be able to afford for me to do this, but why then penalise us for it?
Really starting to strongly dislike George Osborne.

Only really starting to dislike him 24again? I've felt that way for some time now, since about 2010 in fact

Not sure I agree with the comparisons with child benefit. The money input into the childcare scheme can only be spent on childcare. Whereas child benefit was cash that could be spent on anything.
Funding childcare (as opposed to child benefit) directly relates to a policy which wants to encourage people to work.
Though I would emphasise that encouraging people to work does not necessarily (contrary to some views on here) invalidate the choices of those who choose not to work. SAHPs aren't discouraged from being SAHPs, unless you view helping one cohort of society (WOHPs) as somehow targeting SAHPs. Which I just don't see, but then I am happy with my choices and don't need them to be validated or recognised, and I certainly don't compare my lot with others', as that is bound to lead to misery (there are always others who appear to have it better).

there will be an increase in childcare tax credits to 85% max instead of 75% max.

Re the admin point I don't think it will be that bad. HMRC have all the qualifying info anyway.

As it's an annual allowance presumably you can stack it up over a year so although you'll be paying out while job seeking or your child has settling in sessions you might be able to get some of that back but we don't have details on the voucher system yet.

This seems to be encouraging people to have more children if anything!

When one of two options attracts new tax breaks and the other doesn't a government is signalling its favoured course of action. It is a financial inducement to use childcare of certain types. It will affect behaviour, or at least it's meant to!

I'm confused by the new scheme. DP and I are both higher rate tax payers and both buy vouchers through salary sacrifice at the max £124 each a month. Our nursery bill is roughly £9000 a year (and will rise to £18000 when DS2 arrives in a few months).
So currently we save about £1200 a year in tax through the current scheme, and can't save more when DS2 arrives. Am I right in thinking we will save 20% of our total nursery costs (up to £10,000 per child) through the new scheme rather than saving 40% of the proportion we can buy via salary sacrifice now? If so does that mean £1800 savings for one child and £3600 for two? Hope someone can explain - my pregnant brain is not functioning well today

Can I just point out that there are still costs to caring for a child at home?

As a SAHP only thing that doesn't get paid for is my time. Other than that the "care" my child needs is exactly the same as any other - 3 meals a day, personal care, stimulation and varied activities. They may not cost the same price as a nursery place but they do cost me a small bloody fortune!

Tbh I have said it before and think this is another divide and rule tactic designed by schoolboy politicians to make us argue amongst ourselves about how the work done by SAHP is so much less worthy than that of ordinary taxpayers rather than address the real issue which is that childcare here is extortionate, unregulated and unaffordable.

All this tax relief will just be absorbed in fee rises before we know it anyway and we will be back where we started.

I echo the above point that I would rather see taxes going into better education than subsidising childcare costs to ultimately line the pockets of childcare providers.

I don't think that SAHP should automatically be entitled to this but I do think that it should be means tested so that those who stay at home BECAUSE childcare is unaffordable are supported too.

GreatSoprendo

That's how I'm reading it. The govt will contribute up to 2k for every 8k you pay towards childcare, per child. So 20%.
20% 9000 2 children = £3600

Sounds like it will certainly benefit you more than the voucher scheme.

(Though my brain is also 27 wks pregnant so maybe someone should come along and verify!).

woodlandwanderwoman Those costs also apply to those of us who use nannies, as I cannot pay for food/activities etc out of any childcare scheme. To be honest i would never expect someone else (i.e. tax payers) to pay towards these. I think you've got to be really nitpicky to resent paying for these items for your own children.

It is globally recognised (cf. womenomics) that getting women into work has a huge impact on economic growth. Like it or not, this is the real world we live in and a government would be mad (or go bankrupt) if they were to ignore this fact and not try to increase the numbers of women working. Especially with an ageing population, we all need to work for longer. There is untapped potential in women opting out of the workforce, made even more severe when those very women have been educated at a high level. So whilst I do see the value in people staying at home to look after children, especially during the early months/years, I also think that if we all expect fundamental services and social care/safety nets from the society we live in, governments that we elect will seek ways to pay for this.

My children are in nursery and I pay for three meals a day for them!

I still haven't forgiven George for taking away my child benefit. My husband (who works very long hours) earns just over the threshold for child benefit and I am on a low part-time salary, providing my own childcare. However, George has allowed families where two parents are earning up to 49,999.99 each to keep their child benefit. The new childcare tax break scheme is to be available for parents earning up to 150K each in a bid to compensate them for the loss of child benefit. It doesn't help people like us! A family earning 300k surely don't need such help whereas a family where only one person is earning over 50K gross is NOT well off (I know there are people worse off but trust me we are struggling to make ends meet). Why not just reinstate child benefit as a universal benefit and reduce the salary on which tax relief on childcare is available? I suppose this salary figure is irrelevant anyway given that it seems they are keeping the existing childcare voucher scheme as well! On a final point, this new scheme is only available for children up to age 12. Are you supposed to leave a 12 year old home alone every evening after school and during the school holidays while you work full time? Even if you were given financial help with afterschool childcare for the over 12s, I don't think there is any - not in my area anyway. So, Mumsnet, please represent this viewpoint also next time you are asked to comment.