Subscribe to FeedWhat is the Government planning?
What is the Government planning to do about Childcare Vouchers?
- After April 2011, there’ll be no tax breaks on new Childcare Voucher schemes which are set up, so they will once again become a cost to employers as they were in 1999
- After April 2011, no new employees will be able to join existing schemes and benefit from tax breaks
- After April 2015, all old schemes will lose the tax breaks for people who were members before April 2011 – which means that at that point, employers will stop offering existing schemes
The stark facts are that unless we can do something about it, Childcare Vouchers as we know them will be phased out from 2011.
What the media is saying:
The Daily Mail: ‘Mugging for the middle classes’: Brown’s free childcare for poor could cost better-off families £2,000 a year
Scotland on Sunday: Battle looms over bid to tax childcare vouchers
Get involved:
Sign the online Downing Street petition here: http://petitions.number10.gov.uk/keepvouchers/
Would you benefit from the new plans?
Click here to find out: http://www.vouchersblog.co.uk/childcare-vouchers-vs-gordon-browns-new-plan/
Fancy Gordon Brown wanting to add more tax burden onto parents who work and contribute to society. I never would have imagined that from the miserable little thief who gave us no less than 40 stealth taxes in his final budget as chancellor (details here: http://www.telegraph.co.uk/news/uknews/1546515/List-of-Browns-stealth-taxes.html) providing a nice £15.5bn of extra revenue to the government. Overall it is estimated that the total tax rise averages at around 17p in the pound since Labour came to power. So much for not raising taxes. Oh, and now as a country we are in a record amount of debt that our kids will still be paying off in 50 years time. Way to go Gordy.
I cant wait for the general election.
Without child care vouchers tax benefits we would not be able to afford child care and either my wife or I would have to give up work. Gordon can then wave goodbye to all the tax we pay. When unemployment is high and tax revenue low forcing those with jobs to give up work and losing that tax revenue is one of the most stunningly stupid ideas I have ever encountered.
But will people be able to claim childcare costs/tax relief under the Working Families Childcare Tax Credit scheme instead, though? I used to get this before I used vouchers, I save pretty much the same amount of money. This still doesn’t explain why the voucher scheme is being scrapped, but I am wondering whether we are getting the full story here. Maybe its being phased out because a different system will replace it.
Does he not want to win the next election? These vouchers make an enormous difference – why are we being punished for trying to work??
For Nicky who commented that she resents ’subsidising parents domestic arrangements’, is she not aware that our children who we are working so hard to educate at vast expense are our future tax payers. Who does she think will be contributing their hard earned money to fund the NHS etc when she has retired.
As a single mother of two small children the vouchers make a big difference to me. Every little bit helps. As it is I cannot afford full time nursery care and only manage to cope because I was blessed with such wonderful parents.
It’s typical of the labour government. The poor get more money for sat on their backsides dragging their kids up and doing nothing else much apart from spending their benefits on cigs & alcohol. The middle class spend their lives working hard to have the good things in life, to give their children the best they can and to save towards their retirement. They don’t ask for hand outs and don’t get any anyhow but just end up paying more taxes etc to pay for all the lazy losers in this country. Sometimes you wonder why you bother – oh I remember now, cos we don’t want to be one of the dossers of our society!I am getting a bit fed up of this pattern now. It’s time for a change.
David C hit the nail on the head…
“You have to be either very rich or poor in Britain in 2009.”
If you sit at home watching daytime TV with no inclanation of ever working, you get a free house and some pocket money
If you actually go to work and do the best you can you get penalised every which way
If you’re the landed gentry you can laugh it up from the comfort of your brand new range rover
A sketch comes to mind…
“I look up to him, because he is upper-class. But I look down on him, because he is lower-class.”
What is the government doing for me? We allow over subscribing on immigration, meaning we are supporting more and more people out of work. You want me to work for longer to pay for some one else’s pension! You offer me no tax savings or allowances, I am a middle class working man!
All this and now you take away child care assistance to offer some layabout the chance to watch Trisha in peace! I would be better off on benefits. It stinks!
Susan Devlin – my child (children if I am fortunate to have another in the next 12 months)will be in school by 2015 so like you, this won’t affect me personally. However what a short sighted view you have. It seems that you think ‘I’m all right jack, sod the rest’. As far as I’m concerned, even though it won’t directly affect me, it is an appalling decision by Gordon Brown. It just goes to show how badly our government treats working parents and gives me more incentive to emigrate to a country that provides much more funded childcare to encourage parents to work.
And Nicky? – well words escape me. I don’t think you have the intelligence to grasp that people who get the tax relief from childcare vouchers are the ones who are working and paying their tax and NI. If the scheme is scrapped I would imagine there would be a lot of parents who would have to give up work as they couldn’t afford the child care costs. So taxpayers would end up contributing towards their benefits and tax credits anyway.
This abrupt change of policy is a disgrace. I don’t know how my wife and I would be able to afford to work without vouchers. Yet again this labour government is squeezing those of us who work hard. What would the government prefer: to give a bit of tax back and have people working, or thousands of parents giving up work (and claiming benefits) to care for their kids? Politicians amaze me at their ability to show themselves to be out of touch and disconnected with everyday life. Of course, I’m sure the politician’s childcare expenses can be claimed as tax-payer funded expenses!
My personal opinion is that all childcare costs should be free from income tax, not just £243. But at least it was a step in the right direction.
The government should spread the tax burden, not single out a minority and take away something many people now rely on.
Anyway, it’s a moot point. Labour won’t be in power this time next year.
It frustrates me that the government (and let’s face it, the opposition) are so short-sighted in proposing this easy option. In all their projections of ’savings’, where are the losses mentioned in tax revenue? It’s not an idle threat that women would give up work – why would they go if it made no benefit at all? Even as things stand with childcare vouchers, with one child at nursery and one expected, we’ve worked out we’ll hardly break even when we’re paying for two. With vouchers abolished, I would not only not make any money but it would cost me to go to work. Only a fool would do that!
The government also conveniently fails to mention the equality impacts for women of this move – as we all know how having or not having a job has long term impacts on future earnings and pensions etc. I demand that they run an ‘equality impact assessment’ on this proposed policy (as they require that every other public sector organisation must do on their policies to show that they are addressing equality ‘targets’). How would they wriggle out of this one?
For many parents the only honourable option is to go out to work, not to mention for many parents that if they do not do so now the skills gap may be so large that they can not return to a decent paid job. Yes having children is a choice, but so is it a choice to try to work to feed and clothe your family by hard work rather than through relying on housing and income benefits. Many working parents do so for very little money after they have paid for their childcare. I wonder whether Nicky would like to work 40 hours per week in a demanding job to bring home £100 after childcare costs. Even more so I wonder whether she would like to pay £150 a month for the priviledge of doing so. This will be the effect of this removal of the tax rebate. Free childcare places do not work. Being given 2 hours a day 40 weeks of the year does not enable you to hold down any kind of real work. That’s assuming you can even get a place. Even when children go to school in order to have a job that pays a good wage you need breakfast clubs, after school clubs, holiday clubs etc….We contribute to society, through our hard work (many of us work in low paid jobs providing esential services – nurses, teachers, university lecturers – which without society would not function) and through our taxes and NI we pay when working.
Actually Nicky I thought that having children was for the continuation of the human race not a mere lifestyle choice.
I mean, if people all took attitudes like yours then who will be around in the future when we’ve all retired, to carry on paying taxes into the systems which I presume you use? Systems like this are there to help people with childcare costs so that they are able to work and pay taxes, just like you do. Would you rather they stayed at home better off on benefits? Because if you take systems like this one away that is what is going to happen.
What about the the companies who administrate the CCV system the jobs of it’s employees? Mindless plan. I’ve signed the petition.
Why? Wake up Gordon. What is wrong with you? Do this and you will certainly lose my support.
To Nicky,
It is half wits like yourself which lead to the breakdown of a civilised society. I am incensed at your lack of forethought. As already pointed out the cost of people stopping working will be far greater than these welcome tax breaks when parents have to claim benifits. On top of this you won’t be receiving their tax contributions or NI but don’t worry as I am sure you’ll be fine especially with your obviously high level of intellegence!! Oh and whilst I mention it, you refer to having children as a ‘choice’ which is true to a degree but it also helps animal species to survive and flourish if they procreate (for an easier explanation please refer to the Lion Kings – Circle of Life). I trust of course you too were a ‘choice’ and not found growing by accident in your parents allotment!
This news is not great for the average UK resident. If my childs grandparents wouldn’t be so devasted I would up and leave Britain tomorrow as I feel I am constantly being punished by a Goverment who time and time again feels the need to hit the ‘normal person’ in the pocket.
Another reason for why, once you have children, you are better off not working. 10-15 hours free childcare for 2 year olds is pointless, it does not help anyone who actually works for a living as opposed to living off the state. This was one of the best tax savings and support I had as a working parent and I felt I earnt it given the fact I was contributing via my taxes to actually providing it which is more than can be said for a lot of people in this country. I like the fact that MP’s and bankers get all the funding and privaleges in life while we all work to pay for it. Problem is, the conservatives have an even worse record with these things!
To Wendy –
I’m not sure if you are aware but if you are accepting tax exempt vouchers as payment you also are required to be accredited.
To Nicky –
Quite right.
To Everyone else – You may think that you need support but this is not the way. This helps the richest in society the most. How can you possibly tell me that is right and just? Tax payers not only subsidise all your childcare but for families to pay for horse riding lessons and boarding fees. They also pay through their taxes private corporations to offer the scheme, the bigger the company the more tax money they save and part of that saving goes to another private company to administer the scheme. Plus the porrest cannot even get the benefit as you do not qualify if the salary sacrifice takes you under min wage.
Massive amounts of public money diverted to large companies, many of which got us in this financial state so that we can save the richest the most. If all this money was saved their would be money to assist low-income and middle income families who need support currently a third of this scheme are top rate tax payers.
I don’t know why i bothered writing this much. The Childcare Voucher companies don’t want you to know the truth.
In his argument for getting rid of childcare vouchers, Gordon Brown says that too many higher tax band parents are benefitting from the system. Does he not realise that many higher tax band parents can afford to pay accountants and will probably just get the money back through some other loophole?
It is parents like myself, earning too much to get any other benefits, but nowhere near the top income tax bracket (probably the majority of families in the UK!) who will be hit hardest by this. He certainly won’t be getting my vote.
I’m not sure anyone on here knows enough about the scheme to really comment. They only know the scheme from a personal perspective. Do they know what that saving really costs? If they are stuggling financially why would they want to continue to susidised people who are are comfortable or even very well off?
Thank you for being fair and allowing opposing views.
Carol – Public Sector.
You logic makes no sense. The public sector is paid for by the treasury. If they save money from this scheme money that is otherwise going to private sector businesses and high-rate tax payers the saving would mean more money in the treasury and therefore is more likely to increase public sector funding. Why pay a bit to public and a lot to private when they could without the scheme give it all to the public sector? As it is the public sector organisations are paying private companies such as those listed above to offer the scheme.
Gordon Brown has no idea what childcare means to working parents. He has no idea because he probably never had to pay for childcare as he probably claimed it on his MP expenses!
This man needs to go as otherwise this country will go to pot.
Interesting one this. My wife decided to stay at home to look after our kids – something I will be forever grateful to her for doing. But I understand why this is not an option for many people. If tax breaks for childcare had never been introduced then there probably wouldn’t be this reaction. Like most things, once they are introduced people become dependant on them (in some cases people change there lifestyle so they rely on the extra money coming in. When it is withdrawn they then need to adjust their lifestyles which they are reluctant, or find very difficult, to do). It is a moot point as to whether society should give tax breaks to people who decide to have children. I got no tax breaks because my wife decided to stay at home. Quite honestly, I didn’t expect any. The decision to have children was ours and I didn’t expect anyone else to help us financially. As for whether governments should encourage people to have children, given that many people (the Optimum Population Trust for example), feel the world is already overpopulated maybe we shouldn’t encourage or discourage either way? I feel having children is a personal decision and my wife and I took into account the impact it would have on our income and adjusted our lifestyle (downwards!) accordingly. I do feel sorry for those who have become dependant on the tax break but if we have to save money I can see why it is being considered (amongst other things).
I thought this was a joke when I first read it,,,, one sick joke !!! What on earth is our elected Government thinking of. My partner and myself both work and earn just over the threshold for WFTC so are not eligable to get help via tax credits or help with any nursery costs, apart from the small amount of tax relief we get using these vouchers. Crazy,,, If I didn’t work and we earnt less each year,, we would be entitled to WFTC and so would be taking money from the Government via the tax credit system !!!! As it is at the moment, if we deduct our childcare costs from our combined salary’s, I know our total income into our household is almost the same as people who are claiming tax credits and getting help with childcare costs too via WFTC… Like I said earlier,,,,, crazy !!
My wife and I are middle class working professionals in the public sector and have two young children, one in primary school and one at nursery.
We earn just enough to drive two older cars, pay a modest mortgage on a terrace house and are on a gradual, but unavoidable, downward slide into debt which we see no way out of.
This week we have been told things will get much worse over the next few yaers, we are having a pay freeze and will have to work longer. Now we are going to help ‘the country’ get out of debt by having even less help!
Without getting political, we seriously doubt that cutting this migre benefit for the few will pay off the £175,000,000,000 debt (at least). All it does is push normal people away from politics as you can’t beat these disorganised money grabbers – remember their expense claims a few months ago.
Whos worse the state leaders or the state scoungers??
I’ve just scanned the Computershare website with a link to the petition, as well as a brief look through the Daily Mail news item which the Computershare website linked to (I expect that goes for most of the commenters here?).
It sounds to me as though Brown is planning to introduce 10 hours of free childcare to lower income families, so the axing of the current scheme will mostly affect higher income families whilst low/middle income families will actually end up better off, even if they have to top up the 10 free hours with some full-price hours. Sounds ok to me.
I think you should bear in mind that the issue has been highlighted by Computershare Voucher Services, and it’s my impression that they have a vested interest in the scheme’s continuation.
Why oh why, do the labour government continue to punish the honest working class families? It is about time that they and all MPs from across all the parties, realise that benefits for the cheats cannot continue, and that those who earn far too much or who continue to claim non-domicile despite using our services, are penalised through paying higher taxes. This would actually go quite far in closing the hole, that these individuals are largely responsible for. Oh, I forgot though, we actually need a government which is prepared to stand up and make these decisions, rather than worry about where their next party donation is going to come from.
[...] the government’s plans will hit hardworking families such as ours and for what? So that we can pay for other [...]
You think this is bad, have you seen the Tory proposals? Screwed both ways, just a matter of how hard. Surprised the Tories plan to go so far, seems totaly OTT.
Why are my comments not being put up???
After writing numerous posts about the truth about tax exempt childcare vouchers and why, once armed with the facts most would be calling for this entirely unjust scheme to be scrapped, that have not been published by the site do you decide you can publish me asking why?
To everybody complaining about benefit cheats, they cost us an estimated £6M a year. MP’s expenses cost us wroughly 90M. Trident renewal (a weapon that would destroy the world if ever used) 34BILLION – and thats a conservative estimate. That means trident would pay for all the cheats for 5600years!!!
Get your priorities right and find out about where the money is really wasted.
I’m just a hard working parent, whose husband has seen his income halved as he worked in property realted trade and was made redundant and now can only find work at the minimum wage in hours that mean that we have had to increse the child care we need, but at least he’s working. The Child care voucher scheme has helped us stay afloat in these hard times and now they want to take it away… so we’ll just become another statistic eventually.
When we planned our family we made sure that we could afford to keep them. But that was before the financial people, who earn more in a year than I will in 10 messed it up for the little people…….
The Conservatives will do the same, nice while it lasted, but the country can’t afford it now…
One vote lost, we have two kids and my wife works so we can afford the childcare. We can only afford it with the vouchers. I guess she will just claim bennifts instead and stay at home. With a lot of people doing this I guess a lot of child minders will be out on the doll also. We done brown, another nail in your coffin!
Completely unacceptable!
I’ve just skim-read these comments. It is not just the childcare voucher companies that have an interest. As it is, the proposal is a mean-spirited, sneaky way of removing support to a large number of people. I am a working mother with two children. My husband works too. He gets this vouchers through his employers, who do use a large childcare voucher company, for ease.
I am also one of the 1m working people who lost out from the loss of the 10p tax rate. I notice that the posters who are most anti this scheme are either men – who do not generally have to deal with the practical niceties of organising childcare (evidenced by numerous studies) or childless women. So much for progress and solidarity.
I set up my own childcare voucher scheme, which is perfectly possible, but not widely publicised. There would be no point in my working if I was not able to sacrifice £243 per month from my salary towards vouchers, but as it is, I have been able to employ someone else (who is also young – a group suffering from high unemployment currently). I have been able to keep my business running and employ other people. I have been able to continue contributing as an individual through my tax and NICs. My skills and knowledge are current and I am able to combine parenting with worthwhile work. We would not qualify for any tax credits – and consider ourselves very fortunate – but we do not have an extravagant lifestyle, rather like the two people working in the public sector, with two ageing cars and a modest mortgage. This kind of cut just makes life that little less enjoyable – the death of a thousand cuts.
Another important point is that we do not ‘get’ £243 free! We choose to sacrifice £243 to pay for buying a voucher. What we receive relief on is the TAX and NICs – a small part of the £243. It’s the same principle as the Bike to Work scheme. It seems lunacy to make such a small saving (in the overall scheme of things), when it helps in so many other ways to leave it. The vouchers do not benefit the rich more than the middle income groups, but there is a ceiling of £243 which has not increased since it was introduced. Therefore, whether you earn £12,000, £40,000 or even £150,000, you only benefit by the same amount.
Added to this are the social factors: it is proven that mothers in particular, thrive if they have some role outside the house, whether paid or voluntary. Children benefit from having a working parent as a role model. Individuals benefit from having work or structured activity of some kind, as a reason to get out of bed, frankly.
It is disappointing that some of the people posting on this choose to criticise other people and situations, rather than focusing on why this little publicised, relatively cheap but quite effective scheme should continue. It is amusing to see how easily some are hoodwinked by the conservatives; if we think this government is weaselly or mean, it will be much, much worse with them. The Telegraph and Daily Mail shouldn’t be your only sources.
Some of the replies on here are very well thought out, some sadly aren’t. Fortunately for every Nicky and Dan (who needs to calm down; the replies are obviously moderated before being posted) there’s roughly 28000 signatories on that petition who agree with the likes of Sarah. Bravo to her.
Although i’m deeply concerned about this…I doubt labour will be in for long! My husband and I both work full time on good salaries, we have 1 child and she is in nursery full time, without the help of these vouchers, the little bit of money left over at the end of the month will completley diminish! Why should we have to struggle when we doing our best to provide our child a secure future by both of us working, setting a good example!
If this does kick in 2011 – my child will almost be at school, but still I will be loosing c £500. Thanks for that Gordon!
The proposal to scrap the voucher system is ridiculous!
More and more working families will be made to seriously consider if it is a worthwhile exercise both parents working and leaving their children in the care of nurseries.
The knock on could potentially be enormous.
Scenario:
Both parents in full time employment with two preschool age children, working full time hours. One decides to leave work and be a full-time parent/home-maker.
The government will lose both tax and National Insurance Contributions for half of the working family. In an average income family this would equate to approximately £8000.00/annum.
Nurseries will see a rapid decline in demand for places, therefore the nursery will lose the revenue generated by having two children in full time care. This would equate to approximately £1500.00/month
Nurseries would then have to make their care-staff redundant.
Nurseries may be forced into closing, if there are outstanding mortgages on those properties, the banks could potentially lose out.
Redundant nursery staff would have to claim job seekers allowance, ultimately costing the government/taxpayer.
The government would be forced into assisting people with re-training – another cost to the country.
Do I need to go on?
The country is being run by a bunch of muppets! No wonder we are in so much trouble.
Rant over.
I am a parent and think that child care vouchers are costing the government and the general tax payer FAR to much money. The greedy nurseries are the problem as they charge too much money for what they are. The government should run nurseries and make them all free from 6 months old and scrap child care vouchers. If you don’t want to go via the government system then pay private yourself. End of the issue and everyone saves money.
Wendy M
The financial people messed it up so why would you want to continue a scheme that removes money from the public and distributes it to those same companies? Millions every year.
As i said before people have to understand the scheme fully before they can really comment. Simply stating that you will be worse off is not addressing the whole story. Surely everyone believes that it would be better to have a system that doesn’t pay millions of tax payers pounds to private companies and in fact gives that money to the people that need it, and maybe thats you. There would be a lot more money available to set up a scheme that is actually fair once this dire one is scrapped. You should be campaigning / signing petitions for that not to save this one.
Bob –
Your almost right but the nurseries are not the major problem. Most companies offering the scheme save more in their NI contributions each month than a nursery makes in 10 years.
But you make a good point that once we stop giving so much tax payers money away we could use it to give free childcare – this is what we should be calling for not to keep a system that currently pays for things like horse riding, boarding school fees and holiday camps.
The fact that this site uses a Daily Mail quote says it all!!!!
What an inconsiderate approach! Mr Brown and his Labour government are so insensitive when it comes to young working families. Do not worry Gordon though……the time for the next election is approaching…..the clock is ticking……all of us working and raising families at the same time will never forget the way you want to treat us!!!
typical of the government, punish those that work because its easier than dealing with all those benefit cheats that dont!
as a single parent – with a fulltime job and very little maintenence – i could not afford to work without help with childcare costs. i do not want to sit on my a***, watching jeremy kyle all day. i want to work!
if the government got on top of benfit cheats and frankly too many immigrants that we cant afford to keep on benefits, then we wouldnt have so much a cash crisis in this country….not to mention politicians expenses claims.
the working class get persecuted as we’re easy targets. not being doleys, we dont get legal aid to employ a solicitor to fight our case, not being upper class we cant afford to employ one with our own money. stuck in the middle.
I can’t believe the Labour government plans to scrap childcare vouchers. Nursery fees either cost as much as or is equivalent to a mortgage. Scrapping these vouchers only makes us working class struggle more and will certainly result in my not working and having to take benefits. We are already counting the pennies as it is due to the ridiculous cost of childcare. Gordon Brown you need to find another way to raise cash to fund free nursery for the two year olds. One way you can do that is by ensuring those on benefits get jobs rather instead of making the working class fork out more money. OR better still ensure fees charged by nurseries are reasonable.
I think people should at least read some of the other comments before posting. Everyone seems to be ignoring the facts and continuing to complain.
What is the government trying to do to the middle class? My husband and I both work full time, we have no family living in the area to help us so because I have the luxury of being permitted felxible working (till they take that back!) we manage our child care between us and with a place at the local under 3 unit. We don’t get a penny other than the standard £20.00 per week for our son, I struggle to meet the costs of everything and find I work for nothing really! No working tax credits – nothing!!!
Hang on a minute I thought the Government wanted us to work, or did I get this wrong! There has to be incentives to get people into the work again, and this is a fantastic one. To take this away, takes away the options and choices that parents have when it comes to working and raising a family. Wasn’t it a headline the other week that for some it’s better to stay on benefits than get a job because there is not enough incentives like this one. Lets face it Gordon has lost it, what does he think he’s doing hitting the working classes, Labour core voters with stuff like this.