BusinessCompany NewsTories to shake-up childcare tax system

Tories to shake-up childcare tax system

Tory leader Michael Howard today promise to shake-up the childcare tax system in a bid to win the crucial 'family vote' at next year's UK General Election.

Link: Conservatives propose new tax ‘direction’

He proposed to allow parents to spend their tax credits on any form of childcare rather than just registered professionals.

Mr Howard is also looking at helping grandparents to become childminders quickly and at increasing maternity pay to up to £150 a week.

All families will be entitled to tax relief on childcare – including nannies – under the Tory proposals.

But Prime Minister Tony Blair hitback by promising to provide dawn to dusk childcare for all families to make ‘latch-key children’ a thing of the past.

With more mothers working, Mr Howard announced that the childcare tax credit – worth up to £140 a week – would be reformed. The cash could be paid directly to parents who qualify who could then spend it on the childcare they want – an au pair, a nanny or even family and friends.

In addition, he is to consult making childcare costs tax deductible for all families as childcare is still expensive even for those who do not qualify for the credit.

He is also looking at ways of increasing the £102.80 maternity pay given to new mums for six months up to possibly £150 for 12 – and allowing fathers to claim it if the mother wants to work.

Mr Blair was fighting back when he addressed the Daycare Trust Conference by saying that Labour in England would provide ‘wrap-around care’ for all primary school age children from 8am to 6pm by the end of the next parliament.

Breakfast clubs and after school clubs would be available all the year round to enable working mothers to drop off and collect their children as their life dictated.

Mr Blair promised that the childcare would be affordable – with the cost of £2.50 to £3.50 a day. Parents on tax credit would be able to claim back 70 per cent.

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