MSE News: Childcare voucher tax breaks may be axed

kateab

Well, I could be the lone voice here but I've never understood the point of a scheme to help people pay for their childcare which only benefitted those on higher incomes. If you're going to give tax relief on childcare, either give it to everyone or not at all.

kateab

SarahNeedle1872

The reason it was more beneficial to those with a higher income was because people on lower incomes usually qualify for tax credits/ working tax credits. 40% tax payers don't get much, if any tax credits.... Thats why in Martins article about it, is says that you may be worse of if you are claiming working family tax credits

HTH

davidlizard

We have two children, one part time in a nursery and the other who goes to a child minder after school. So we are likely to be paying for childcare in one form or another until well after 2015.

Having read the article, I have some questions.

1. Currently only I take vouchers as this pays for the costs - can my wife take them as well so we build up a surplus that will take us well beyond 2015 (or 2011 whenever it is that you can no longer get them without the tax break)?

2. Does what this government say will happen in 2015 make any difference, as they look like being booted out of office in 6 months time, and the new government will then revise the spending/budgets anyway?

LizzieS_2

SarahNeedle1872 wrote: »

The reason it was more beneficial to those with a higher income was because people on lower incomes usually qualify for tax credits/ working tax credits. 40% tax payers don't get much, if any tax credits.... Thats why in Martins article about it, is says that you may be worse of if you are claiming working family tax credits

HTH

Yes but for those on higher incomes for whom tax credits was not the best option - vouchers do help those in the higher income brackets than those in the lower ones, which is strange considering the costs themselves will be the same.

Not ever having been in the income bracket for vouchers to be more beneficial and having brought up children before any of these help schemes were introduced, all I can say is that like many more I afforded the cost of my children without any Government help (apart from child benefit) on a much lower income, so admitedly I find it hard to sympathise with those who have a better ability to bear the costs themselves.

Dizie

davidlizard wrote: »

1. Currently only I take vouchers as this pays for the costs - can my wife take them as well so we build up a surplus that will take us well beyond 2015 (or 2011 whenever it is that you can no longer get them without the tax break)?

BOTH parents can use the scheme although whether they'll be valid after 2015 I don't know. When I had my 2nd child, I had just been made redundant and so my husband continued to pay into his company scheme to build up a surplus for when I found a new job.

Personally, I don't think the scheme only benefits those on higher incomes. Our family income is below the so called national average, but more than £16,000 which is the cut off to be able to claim to have up to 80% of your childcare costs paid. For us, our childcare cost is circa £6500 per year, 1 baby in nursery and a school child in before/after school club and holiday cover. We are both in the standard tax bracket, not the higher rate, and so it saves us £972 each per year, so just under £2,000. Most of my income is taken up by childcare costs, but it has got me back into work and once my son turns 2.5 and goes into pre-school care, this is cheaper than the baby nursery rate and so will save us a little more.

jsg2

Also the governments "free nursery" places for 2-4 year olds is not much use to people who need more flexibility - i.e. using a childminder.

Plus what happens when they go to school - people still need childcare, but now will get no support. This decision to scrap the voucher scheme will affect the lower paid as well as the higher paid.

This is a badly thought out plan, and I can only hope that this government will be out of power before they have a chance to put it into effect. Although I wouldn't put it past them to sneak it into the budget before the election.

Guccigirl

Well both my husband and I are certainly no way near the 40% tax payers and we don't qualify for working tax credit or childcare element of tax credit, but we do get just over £8 per week child tax credit.

These childcare vouchers have been a godsend as we pull back over £80 per month which is a great deal to us as just managing to get by at the minute with utilities/food/council tax rises but employers not willing to give any increase in salaries due to the credit crunch..

GB has seriously lost the plot - now gives out money to those who are pregnant to aide their healthy diet (by the sound of forums most spend the money on the latest prams), gives out additional maternity payments, pays out goodness knows how much with the Child Trust Fund. Now and after telling mums we need to work and encourage the work ethic wants to punish us so that we cannot afford to pay for childcare! He obviously wants more people to be unable to pay their mortgages and bills, end up losing their homes and claim benefits!

They've spend billions (if not trillions) in excess of what they should and now they're panicking and trying to do scratch at anything to save money. It's ludicrous and it's too late GB!

Of course he will have to spend money setting this up and who will pay for that? :mad:

Guccigirl

Forgot to mention the wraparound care for older children who need cared for before and after school, which childcare vouchers can be used for.

Our son started nursery at 5 months so well below the 2 years stated. Who would have paid me to stay off work?

This will only drag more and more people away from working without recourse of claim to benefits and the welfare state will need more funding to help those he's dragged there.... what a fool.

mumof2girls_2

I was gobsmacked to say the least!

My OH and I are not high earners (OH is on 20 odd) and Im on 9k ptime, by the time we pay our childacre £700+, mortgage etc, we are bloomin low earners! I rely heavily on these vouchers through salary sacrifice.

Yet again, penalised for working!

EDIT: I have signed the petition!

TotallyBroke

Dizie wrote: »

Our family income is below the so called national average, but more than £16,000 which is the cut off to be able to claim to have up to 80% of your childcare costs paid.

I am a single working Mum, I earned £24818 last year and I still get help towards childcare through the tax credits. So I don't know about a £16,000 cut off. There is a cut off for working tax credit but you can still claim the childcare element without wtc. My old childcare costs are £125pw and I got £385 every 4 weeks. My costs have now gone up to £150 per week so my award says an approximate payment of £485. (I can't remember exactly I'm at work, paperwork at home)

If I did the vouchers at work instead of the tax credits I'd be worse off.