Childcare should be tax-deductible
Working for your family
During my first pregnancy, I had no working-mum role models so I had no idea how much maternity leave I should take.
The Government provided paid parental leave for 14 weeks. In my ignorance, I assumed this was based on research that said three months was the appropriate amount of time to spend at home with your newborn.
So when my daughter was three-months-old, I dutifully returned to work and started paying taxes again.
I was incredibly lucky in how well that worked out - my midwife said the prospect of returning to the work part of my pre-baby life probably helped me escape post-natal depression.
I had a fantastic boss who let me work three days a week and use my office for expressing twice a day. I had colleagues who supported my part time work by managing my files in my absence.
My nanny was wonderful and my daughter loved to see her. My baby was perfect too, happily taking bottles of expressed breast milk, keeping to her routine and not complaining when I kissed her goodbye in the morning.
I believe I mitigated the effects of my absence because I was fortunate enough to be able to afford a nanny, who could provide one-on-one attention when I wasn't there to give it. But I had to pay the nanny out of my after-tax pay, so there wasn't much left over in the way of financial benefit from me working - the benefit was keeping current in my profession.
If I were a business, the cost of childcare would be an expense, part of the cost of what I do. In a business, this expense would be deducted from income and only the profit would be taxed.
Paying for childcare is the cost of me returning to work. If I couldn't pay for childcare, I wouldn't be working and paying taxes (nor would my nanny).
I believe the best way to encourage parents to re-enter the workforce would be to allow childcare costs to be deducted from income before tax is calculated.
This would improve the ability of families to access high quality childcare and would enable parents to return to the workforce more easily.
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