Autumn 2003 - ABC Magazine
Nannies to be more affordable
In today's economic climate more parents work long, often unsociable hours and affordable yet flexible childcare is hard to come by. Many parents would prefer to have their children looked after in their own home and by a reliable, qualified child carer. A nanny is often a family's first choice as she offers the most flexible form of childcare, but unfortunately this flexibility doesn't come cheap. Employing a nanny is currently a very expensive option, as parents not only have to pay nanny's wages but also tax and National Insurance Contributions out of their own, already taxed, income, without being able to claim any form of tax relief for this expense.
But there is some long awaited support on the horizon. The Government has recently announced that the Childcare element of the Working Tax Credit, which has already been extended to include those who use Ofsted regulated childminders in their own home, is soon to include nannies. This is very good news for parents, childminders do not offer an ideal solution to the conundrum of flexible childcare as they are self-employed, prefer to work in their own home and often have their own family commitments, leaving them unavailable "after hours". A nanny on the other hand is an employee who by default works in the family's home and is familiar to working outside conventional hours.
One of the declared Government policy aims is to enable mothers to return to work by supporting improved childcare provision and funding. The proposed regulation and registration of nannies, which is currently being considered by the DfES, could achieve this by making home-childcare available to many more parents and act as the long overdue incentive for mothers to return to work following the birth of a child. Families with a combined income of £58,000 or less will be eligible for financial assistance to cover up to 70% of childcare costs, to a maximum per week of £94.50 for one child and £140 for two or more children.
There is currently an estimated 100 000 strong work force of nannies in the UK, some of whom are most definitely part of the black market, hidden from the taxman. The introduction of nanny registration will mean that parents will have to declare all their nanny's wages in order to qualify for the Childcare element of the Working Tax Credit, which will bring more domestic employment into the legitimate economy and could also significantly increase tax revenue. It will also benefit nannies in the long run by giving them the greater professional recognition they deserve.