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Tax breaks for working parents

Tax breaks for working parents

Tax breaks for many well-off working mothers who employ a range of domestic help could be in the offing under ideas being considered by Prime Minister David Cameron.

The controversial concept came from a recent summit meeting in Stockholm and has already been introduced in Sweden.

The Swedish scheme effectively cuts the cost of employing nannies, cleaners and even gardeners by half and for the government has the advantage that it effectively removes incentives to pay such staff “on-the-black”, cash in hand.

Although the Swedish scheme operates by staff invoicing those employing them, reports suggest that if it were introduced in the UK, the system already operating for some nannies could be used as the basis.  In this way, where a nanny is registered with Ofsted, they can claim a voucher that reduces the tax they pay on a portion of their income. For this to operate, a registration scheme would have to be introduced for other forms of domestic staff.

Watch this space for further information.