Working parents childcare credit details announced
So the Government’s much awaited childcare tax relief has finally been fleshed out and poor old George can’t win. After being criticised over the (also fairly woolly) transferable marriage tax allowance for favouring families where one
woman partner doesn’t work, he is now being criticised for rewarding women parents who do go out to work. Poor lamb.
Yes, the proposed new scheme will only apply where all parents are working, and will give relief at 20% (equivalent of basic rate tax) on up to £6,000 of childcare costs per child, per year, a benefit of up to £1,200 per child every year. However, the relief will not only be available to basic rate taxpayers (those earning less than broadly £41,450 per year), but also to families where each partner can earn up to £150,000. Payments will be made via voucher in a similar way to employer provided childcare voucher schemes.
The scheme is not due to begin phasing in until September 2015, at which point all five year olds and under will become eligible. The following year, six year olds will be added, then seven year olds and so on until all children up to the age of 12 are eligible. From then on, entitlement will stop in the September following their 11th birthday. Not great news if your child is born in August. Also, the eagle-eyed among you will have noticed that if your children were born before September 2010, you can go whistle and you will never benefit from the scheme. I knew I didn’t like this Chancellor.
However, the proposed scheme is only a proposal at the moment, and comments are being sought on the final application of the scheme. Following representations, parents on parental leave and who are carers will now be specifically able to claim even though they are not ‘working’, so more changes may yet emerge before 2015. Revenue and Treasury consultations are normally only receive responses from interested representative groups and pensioners with far too much time on their hands, but to make it easy for parents, the actual people affected, to express an opinion, the Treasury have actually also produced a handy online questionnaire so we can all tell them exactly what we think. About the working parents childcare relief scheme.
The Chancellor has already come under fire from groups championing the stay-at-home parent, claiming the relief stigmatises and excludes people making this important choice. Mr Osborne said he was “on the side of people who want to work hard and get on in life” and told the World at One that he had "huge respect" for mothers who stay at home for "lifestyle reasons".
Laura Perrins, of the pressure group Mothers at Home Matter, spat her tea out and told the Telegraph: "Saying stay-at-home mothers have made a lifestyle choice is pejorative and patronising. They are contributing to the economy, to society, to everything. Staying at home is not a luxury, it's not a hobby. Women who chose to stay at home make huge sacrifices."
One does wonder why they would need to pay for childcare if they had made the sacrifice to stay at home with their children, however.