AT LAST - EMPLOYERS OF NANNIES TO GET A TAX BREAK
Reports over the weekend of 15th/16th May confirmed that the Government are proposing new tax legislation to enable working parents to claim tax breaks worth up to £140 a week to help pay for Nannies.
See report:
Department for
Education and Skills - SureStart - Childcare made more affordable
This is a subject on which Nannytax has been lobbying, on our members behalf, for sometime.
Under the proposed initiative, up to 70% of childcare costs would be funded for children up to the age of 15. In a survey undertaken by Nannytax and published by Nursery World, the cost of a Nanny saw a big rise last year. In Central London a full time Nanny not living in can earn up to £27,000 a year.
Details of the proposals mean that:
- Families earning less than £43,500 per annum will benefit. However even families earning up to £58,000 with children over one, or £66,000 with a child under one, will also receive some benefit. See HMRC pdf form Child Tax Credit and Working Tax Credit - A Guide (You will need Adobe Acrobat to read this form).
- Childcare tax credit is worth 70 % of the weekly childcare bill, equivalent to a maximum of £94.50 per week for one child, and £140 for two.
- The scheme will not be available for parents using family members to look after their children.
- Nannies will be required to show that they hold a recognised childcare qualification or to attend a childcare induction course. They will also have to undertake a criminal record check and will need a valid first-aid certificate relevant to the care of children.
- Nannies will have to register with a new government register in order for the parents to be able to claim the childcare tax credits.
The regulation and registration of Nannies will not only make home childcare available to many more parents, it will also give Nannies the greater professional recognition they deserve.
As a result of this proposed legislation, and the requirement for a registration process for Nannies so that they can be “approved childcare”, all parents irrespective of income will be entitled to relief under the new childcare voucher scheme that was announced in April's budget. Parents who earn too much to qualify for the childcare tax credit above, will benefit as they could be exempt from tax and national insurance on the first £50 a week that they spend on childcare. This could amount to approximately £1,000 in annual benefit for a 40% taxpayer.