|
Think Tank says eight out of ten childcare voucher users basic rate tax payers
A new analysis by the SMF of who benefits from childcare vouchers shows that more eight out of ten users are basic rate taxpayers despite claims to the contrary. During the furore following Gordon Brown’s party conference announcement over the ending of childcare vouchers, and the subsequent modification of this policy, many statements were made over who does and does not benefit financially from the scheme but little empirical evidence was available.
The SMF’s analysis of who actually uses childcare vouchers in the UK suggests that:
- 83% of users pay income tax at the basic rate
- Around 190,000 people were using childcare vouchers in 2007.
- Childcare vouchers appear to be used more intensively by working lone parents than by couples.
- All occupational and socio-economic groups are well-represented among voucher users, with manual and unskilled workers being the best represented group.
- Voucher users are diverse in terms of family structure, gender, geographic location and ethnicity.
- Childcare vouchers provide support for working families throughout the income distribution apart from people on, or very close to, the minimum wage.
The SMF’s analysis shows that the Government’s proposed reforms under which the voucher system will become more progressive, with higher-rate taxpayers only able to claim tax relief at the basic rate, promise savings of just £20m per year for the exchequer.
Commenting the SMF’s Director Ian Mulheirn said
“Our analysis shows that users of childcare vouchers are a good cross section of Britain’s working parents – more than eight out of ten of them are basic rate taxpayers.”
Marc Woolfson, a spokesperson for CVPA, said
“This report reinforces understanding of the vital role of childcare vouchers in supporting parents’ choice to work, and explains why people feel so strongly about this issue. The ability to afford childcare is a deciding factor for parents who want to work and, as we start to recover from recession, it is essential that all efforts are made to help parents in the workforce access the support they need.”
|
Social Market Foundation, 03/02/2010 |
|
|
|
