TaxPersonal TaxTax relief would boost childcare sector

Tax relief would boost childcare sector

The Childcare Commission has called for a variety of tax relief measures to keep money flowing into the profession and encourage more people to enter the childcare industry.

A commission’s report recommended tax relief for parents on up to Pounds 2,000 of annual childcare costs, and for employers offering childcare facilities.

In addition, it said the government should increase financial support for parents during the first three years of child rearing, in order to keep money flowing into a profession, characterised by poor salaries.

The commission presented a number of tax credit options, currently being studied by the Treasury, based on the findings of its report.

One suggestion was for a bigger increase in child benefit across the board, or a means-tested ‘toddler tax credit’, which would only exclude the highest-earners, while another suggestion was for a transferable tax allowance available to all couples where one parent stayed at home to bring up the family.

The report contained no cost calculations, but the Financial Times said chancellor Gordon Brown would only favour the means-tested tax credit option. A spokesman for the Treasury said some of the proposals were very costly, with the proposed tax-breaks likely to cost as much as Pounds 1bn a year.

Harriet Harman, called for childcare, funding to be given equal attention as investment in public services.

Harman told the FT: ‘Childcare needs to take its place as a recognised priority alongside transport, hospitals and schools.’

The report claimed childcare was the fastest growing part of the public services sector and called for 10,000 new childcare centres to be built in all regions in the UK.

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Parents ignoring children’s tax credit

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