Childcare to receive tax boost

Chancellor Gordon Brown polished up his child-friendly credentials last week, promising to help increase the number of workplace nurseries and crêches and announcing financial help for some parents who use approved childcare within their own homes.

There are only about 600 workplace nurseries and crêches in the UK. The Chancellor aims to encourage more employers to offer childcare facilities through tax and national insurance incentives, the details of which will be set out in the forthcoming document Balancing work and family life: enhancing choice and support for parents .

Donna and Nick Johnson, whose first baby, Noah, was born seven weeks ago, hope the tax breaks will enable their employers to extend existing childcare provision for staff. The couple are both registrar paediatricians - Donna works at King's College Hospital and Nick at St George's Hospital in London.

They have both applied for places on their respective employers' nursery schemes, which cost about £170 a week, but, as Nick points out, there is no guarantee of a place. 'About 4,000 people work at the St George's trust, many of whom are women with young children, and there are just 32 places,' he says.

Even if Noah gets a place, the hours could still prove difficult. The St George's nursery scheme operates between 7am and 6.30pm, with extensions to 10pm on Mondays and Thursdays only. Nick says he and Donna will try to negotiate their work timetables so that they are not on call at the same time, but adds: 'Sometimes things can fall apart and it won't be that easy.'

Megan Pacey of the Daycare Trust says the NHS has its own childcare strategy, which may not be affected by the tax incentives directly, but that they could encourage corporate employers to combine forces with public sector employers in the same locality to provide co-operative childcare facilities.

The Chancellor also announced plans to extend the childcare element of the Working Tax Credit to those who use approved childcare in their home, benefiting parents of disabled children and parents who work outside conventional hours.

The move will provide parents who each work at least 16 hours a week with a tax credit of up to 70 per cent of the first £135 a week of childcare costs for a single child, or 70 per cent of the first £200 a week of costs for two children. But the credit tapers to zero for parents earning a household income of £32,000 or more for one child and £42,000 for two children.

This is expected to apply only to registered child minders initially, but Martin Barnes of the Child Poverty Action Group says the plan is likely to be extended to enable nannies to register as 'approved home child carers'.

The pre-Budget statement offered no specific help for single parents, but they will benefit from the Child Tax Credit which will be introduced in April next year. Teresa Goodman, whose son Nathan is 11, works part-time rather than using after-school childcare and so will not benefit from the changes. But she says: 'I still regard Gordon as my friend. Under Labour I've paid slightly less in tax and interest rates have stayed low, which has helped with the mortgage.'

Lights are on green

Most householders will need to start recycling bottles
and other waste in the next few years - or start paying
extra sums for refuse collection, as a result of the
pre-Budget statement. A consultation was announced
to look at a range of incentives for recycling. As
predicted in Cash , Landfill Tax will be doubled over the
next few years - which will not hit householders directly
but could lead to rises in Council Tax.