“Tax breaks for hiring a cleaner could save middle class thousands”
The proposal could save middle-class families thousands of pounds a year in fees for domestic help and encourage more women to return to work after having children.
It would also act to cut the number of illegal workers, who are often paid “cash in hand”.
The idea would be modelled on a successful scheme operating in Sweden which has caught the eye of the Prime Minister.
David Cameron plans to investigate whether the Swedish “maid credit” system could be transferred to Britain.
He expressed interest in the plan during the Nordic-Baltic summit in Stockholm. Mr Cameron told delegates that he was keen to explore Sweden’s experience of “encouraging and helping women go out to work”.
“What you do in Sweden in terms of tax help and tax relief, not so much on child care but on other things that help women go out to work, I thought that was a very interesting idea that I want to look at further.
“We’ve made some big steps forward on the child care agenda, helping parents of two, three and four year-olds with nursery care,” he said.
“We’ve also made some big steps forward in terms of parental leave, but this is another agenda that’s worth looking at. Clearly Sweden has some interesting ideas in this area.”
Specific services eligible for the tax breaks under the Swedish model include cooking, cleaning, gardening and child care.
At the Stockholm meeting, Stina Honkamaa, Google’s executive manager in Sweden, told Mr Cameron: “It’s possible to buy help with housework, like cleaning, babysitting, gardening and so on, at a very reasonable tax rate.
“The actual cost is halved, which makes it easier to promote people to get help at home.”
A similar system in Finland resulted in 92,000 people taking up the scheme in one year alone, with the total tax deduction amounting to €42.70million (£35.80million).
Mr Cameron is under growing pressure to draw up radical plans to help families, who are struggling with the most severe squeeze on their disposable income for a generation. The Coalition is already planning to cut child tax credits and next year will abolish child benefit for all higher-rate taxpayers, a move that will cost some families more than £1,500 a year.
Before the general election, the Conservatives promised to introduce tax breaks for married couples. The Liberal Democrats have stressed that other assistance for families will take priority.
Last night, Labour said of the latest proposal: “This demonstrates how out of touch David Cameron is about the pressures facing women in this country. He is suggesting tax breaks for people who can afford domestic workers at the same time as he is cutting tax credits for working parents and removing child benefit from squeezed families.
“Is this what he means when he says we are all in it together?”
Source: Telegraph Febraury 2012