MSE News: Childcare voucher tax breaks may be axed

meds12_2

Yep, don't like this either. For a start, it isn't a "benefit" as in something unearned, doled out by central government, like the so-called "tax" credit system - you pay it in full, but it's taken out before your income is taxed, much the same way that businesses operate - minusing their costs before the profit is taxed, and you don't often hear about the "benefits" multi-million pound turnover companies are on.

Secondly, just whom are the Government assuming are "low and middle income families"? A couple on £30k each, have more of a net income than a single parent on £60k, due to tax thresholds: would the Gvmnt look at whole house income, or just individual parent income?

Yet again, this Gvmnt are assuming that they know best who deserves what money - no matter who earned it!

THFC

maybe this link to the Downing street petition should be placed on the next main email from martin.

This move hits everybody who take Childcare vouchers not just the high paid.

We both work as we need too, not because we love work, therefore need childcare, maybe one of us should give up work or take up low paid jobs to get more benefits. Gordon brown has just announced an increase in tax for me and my wife to the tune of £1200 - Yet they have been scamming expenses for years.

What gets me is the banks caused all this in the first place, and it's the Uk population that suffer. Maybe my bank will knock £1200 off my mortgage as a goodwill gesture - think not.

RRatchet

Neither of us are earning at the moment as we have only been self-employed for a year and don't expect to make a profit for a few more. Even when we do start to make a profit we'll be lucky if it's more than £20K between us.

Vouchers don't feature in our lives as we're self-employed but I can see how they are very useful for others particularly the flexibility aspect of being able to use a variety of childcare providers. Free child care places are OK but inflexible; eg the way that they are allocated in my area means that parents are only able to use the 5 free 2.5 hour sessions at one child care facility at once. ie you cannot get 3 free places at facility A and 2 and facility B, unless you can prove exceptional extenuating etc circumstances. I've got to admit that the extra year of free child care would only benefit me a miniscule ammount as at present I'm paying the 20% (child care element-80%) of the cost of my little one's sessions (£4.40 per 2.5hr session = £22pw so after child care element I pay £4.40pw). We are farmers so I can in some circumstances take all 4 kids to work and get 'free' labour (not really as they are still more of a liability than a real help) but mostly I wrangle the kids during the day when OH is doing the hard work and then at night I do the paper work/admin. Being very rural the local "free" places are limited to the 2.5hrs per day and as they are mostly parent led facilities you end up running them as well so don't get the 2.5hrs to do your own thing (work or pleasure). I could use an all day nursery if I was to drive 20-30 miles round trip each day but I couldn't afford the petrol/fees/hassle especially on a minus imcome. Also I suppose I could get a "proper job" but oh boy would it have to pay vey well to justify the cost of transport/childcare etc and quite frankly I can't take the stress that would be involved. Luckily I have a relaxed attitude to living in a pokey dump of a house, running a shed on wheels for a car and having no holidays.

Sorry I've gone a bit off topic but I support the retention of vouchers depsite the whole childcare cost issue being irrelevant to us.

Tiney

Smifta wrote: »

Luckily this change wouldnt kick in until 2015 (if Labour miraculously won). My wife would not be able to work if this happened any sooner as there would be little or no financial reward for working. I have a reasonably well paid job, but am a standard rate taxpayer and my wife wouldnt work more thean 16 hours, so no WTC for us. It would seem that this current regime wants to penalise the majority of reasonably educated hardworking taxpaying families. We might well escape the worst of this financial hit should it happen as our second son would have started school, but God help anyone with a work ethic that is starting a family in 2015.

Actually the change will effect new families sooner. Anyone already on the scheme won't have their vouchers phased out until 2015. However, after April 2011, no new companies or families will be able to subscribe to the vouchers, so the effects will be felt a lot sooner.

There seems to be a lot of people on here who don't want this to happen, if that's the case, please sign the petition. There needs to be at least 100,000 signatures on there for Gordon Brown to pay attention. Currently there is 42,176.

It would be great to see support from MSE as well!!!

There is a massive campaign currently running to try and stop this - please show support and get more information here: vouchersblog.co.uk

sly_dog_jonah

On two consecutive Sunday Times' articles they've said the Tories wouldn't reintroduce employer childcare voucher schemes if Labour scrap them, without quoting their source. Is that really true?

Tiney

sly_dog_jonah wrote: »

On two consecutive Sunday Times' articles they've said the Tories wouldn't reintroduce employer childcare voucher schemes if Labour scrap them, without quoting their source. Is that really true?

The likelihood is that would be the case. However, there are lots of conspiracy theories knocking around since Gordon Brown made the statement regarding childcare vouchers.

But if you think of how many people won't vote Labour because of this and the Tories do get in. Then Labour will have saved them a large amount of cash for their balance sheet without all the bad press being directed at them. Who knows what their plans would be, which is why this needs to be overturned before it ever gets that far!!!

bumpoowee

Obviously Labour have no intention of scrapping this idea, just got an email about the governments response...

The Prime Minister said:
“I can see that Childcare Vouchers are a big concern to many of you, so let me take this opportunity to clear a few things up.
Firstly, no one who is currently using the scheme will be affected in the next 5 years, so please don’t worry about any sudden changes. We are phasing in the changes so that families who currently benefit don’t lose out in the next Parliament.
Second, low and middle-income working parents will be able to benefit from childcare support through tax credits that are worth on average £68 per week for 470,000 families - much more generous than tax relief on vouchers.
And third, we are not actually abolishing the childcare vouchers. What will be happening is the Treasury will be phasing out the tax and national insurance relief employees receive for childcare vouchers, but companies will still be able to offer childcare vouchers to the people they employ and in fact, we expect many of them will continue to provide support for childcare.
We are making these changes because we feel that the tax relief is currently badly targeted. Around a third of the benefit for ESC* goes to the 6% of parents who pay tax at the higher rate. But more importantly, we want to use the money to extend free nursery places to many thousands more 2 year olds**. These nursery places are really popular with parents and they give children the very best start in life - helping to achieve a fairer society in which everyone can thrive.”
* Employer supported childcare
** 250,000 places by the end of the next Parliament.

What a lovely man Gordon Brown is, appealing to the publics Greed ("this won't affect you if you're already on the scheme, we just want to !!!! over young families in future"), stupidity ("we're not abolishing the scheme, just removing all the benefits of it that make there any point in running it") and gullibility (all the rest of what he said).