Yep 🙂

djglover your are of course right. Your total cumulative tax allowance before higher rate is £43875 – even less reason to need vouchers!

Ransos > exactly is it right that a household with an income of £80k from two adults get tax credits!
? No if you can,t afford kids Don,t have them I say

I thought tax credits topped out at a household income of around £58K?

^ wot they said – poorly targetted and also not universally available (again, like the bike schemes). "free" nursery hours for all is much better IMO (though we used the scheme when we had the chance)

Childcare vouchers aren't tax credits.

yer i know

havent even bother claim what tax credits we could be due…form looks a nightmare. but we are going in hard on the childcare and cycle scheme through work 🙂

Saying "it's the well off that save the most" technically is true, but not really reflective of the real situation is it?

The well off save the most as they are higher rate tax payers, but they also pay the most through tax the rest of the time, don't they? And saving an extra £150 at most on the CTW scheme is nothing in comparison to the extra tax paid over lower rate tax payers (i know it's all relative, so they still earn more – but that's the way life is….)

DrP

The government need more people to work and pay tax. Childcare vouchers encourage parents back to work. Sure middle earners may save more but they also pay more tax* and therefore fund more help for lower earners. Simples. However, this won't be simples to Mr. Brown et al. They don't like people doing well. It goes against everything Labour stands for.

*Lower earners obviously don't pay as much and the higher earners have accountants to avoid tax.

Yes the well off pay more in taxes but they generally still have more left afterwards to pay for holidays , cars etc. The paradox is that the schemes mentioned ie CTW and childcare vouchers save you more if you are in the highest tax bracket, but certainly in the case of childcare surely they are supposed to be helping those less well off get back to work. As for CTW how many people can honestly say they bought a bike on the scheme purely for getting to work. I know a surgeon that has just bought a very expensive carbon road bike through the scheme and it is hardly ever out of the garage until the weekend. These are just two examples of Gordon Brown over complicating things.

The government need more people to work and pay tax. Childcare vouchers encourage parents back to work

hmmmmm, I'd hope that the well-recognised benefits of sending a child to nursery (even if the parents aren't at work) might be the principal motivation here

I use my CTW bike evey weekday, and sometimes at the weekend. And yes I pimped it. 🙂

I think "well off" here is relative. Higher rate tax payers are not some sort of fat super rich. The majority of us have progressed through "ordinary" jobs and are on PAYE, so no accountants etc like the genuinely high earners.

If you're a middle ranking civil servant, teacher, serviceman etc, you are likely going to be caught by the higher tax bracket (which hasn't really changed substantially since I started work in 91…

I've paid the higher rate of tax since 2003 and have become progressively worse off during that period.

Childcare costs are incredibly high, especially if you are living / working away from family support networks (Normo Tebbs told my generation to "get on our bikes" – so C2W is an ironic benefit!!!). Friends of ours were paying nearly £800 / month for 3 days nursery care for their daughter…

… and it doesn't stop when they go to school. School hours and holidays are notoriously incompatible with workplace hours, so we need morning and evening childcare for ours – or one of us stops working…

My nursery costs are going to be £1700 a month for 3 days, I have twins and my wife will return to work shortly. The vouchers are a mere drop in the ocean.

"The well off save the most as they are higher rate tax payers, but they also pay the most through tax the rest of the time, don't they?"

You're only considering income taxation. If you add in all taxes, direct and indirect, you find that the highest percentage is paid by the poorest quintile.

"I think "well off" here is relative. Higher rate tax payers are not some sort of fat super rich. The majority of us have progressed through "ordinary" jobs and are on PAYE, so no accountants etc like the genuinely high earners."

The median income in the UK is £24k. Higher rate tax starts at £43k, and those paying it are the top 10% of earners.

So relatively speaking, higher rate tax payers are very well off.

Higher rate tax starts at £43k, and those paying it are the top 10% of earners.

IIRC the higher rate always started in the mid £30k s???, and is now £37,400. My employer(s) certainly deducted from my packet from about 34k onwards….

You're forgetting your personal allowance, which takes it up to £43k.