Tax credits for childcare to cover nannies and over-sevens

May 17, 2004 in Adults

Families will be able to claim tax credits for a wider range of
childcare options, under government proposals.

Under the plans, households with an income of up to £43,000
will be able to claim tax credits for care provided in the family
home, including that offered by nannies, as well as breakfast
clubs, holiday clubs, and childminders for children over the age of
7. Currently parents have to use registered childcare such as
nurseries and childminders for under sevens in order to qualify for
tax benefits.

In addition, a new service is to be set up to approve carers
that meet certain standards. Parents will have to use approved
carers in order to qualify for the financial support. Care provided
in the parental home by a relation of the child will not be
eligible for tax credits.

The consultation will run until 16 August and the scheme is
expected to be operating by April 2005.

The Daycare Trust gave a qualified welcome to the proposals, but
said they didn’t go far enough. Director Stephen Burke said,
“Light touch accreditation is a step in the right direction
but it is primarily designed to enable parents to get tax credits
and tax breaks. Why isn’t the current regulatory system simply
extended to cover all forms of childcare? Ofsted should be asked to
regulate nannies and other childcarers to ensure consistent
standards and avoid confusion among parents.”

The National Childminders Association also expressed
reservations, though it welcomed the move to enable parents to get
help with the costs of childcare for children over aged seven.
“This new scheme must be developed in a way that ensures
parents are not left confused about the difference between
registered and approved carers”, said NCMA chief executive
Gill Haynes.

Charity 4Children said that the new regulations would provide
“much needed piece of mind” for parents.

“This scheme offers the potential to offer new flexible
choices, with peace of mind and financial support for those who
need it,” said chief executive Anne Longfield.