3% of childminders applied for €10,000 tax exemption

MOST childminders have been put off from applying for the Government’s much-heralded €10,000 tax exemption because it prevents them from writing off legitimately accrued expenses.

Fine Gael’s spokesperson on social and family affairs David Stanton revealed that just 3% of the estimated 40,000 childminders had applied for the tax exemption up to the end of May.

The new childminding relief that became available in January exempts a childminder from paying tax on earnings less than €10,000 per annum.

Childminding Ireland said the low take-up was because many childminders would face losing money by applying for the exemption.

Minister for Children Brian Lenihan pointed out that the first tax year for which the exemption applies was 2006 and tax returns for the year must be made by October 2007.

“Until that time, the final take-up on this initiative cannot be fully established,” he said.

Mr Stanton said the initiative, which was one of the main features of the Government’s new childcare strategy, was a total failure.

He now believed a desperate attempt was being made to hide this embarrassing fact until after the General Election.

Childminding Ireland manager Bernie Griffiths said many childminders were better off writing off legitimate expenses as they were entitled to do as self-employed business people.

“They aren’t really any better off after registering for the exemption unless they are minding one child full-time and one child part-time,” she said.

Mr Lenihan, who met representatives of Childminding Ireland recently, has agreed to look at the exemption again.

A spokesperson for the minister said he was anxious to ensure that childminders were not put off from availing of the tax break and denied that an attempt was being made to hide the low take-up.

Any childminder who wishes to avail of the tax relief is obliged to return their childminding income in a tax return and to notify their local county childcare committee that they are providing a childminding service.

Ms Griffiths said childminders were obliged to be tax compliant to avail of the exemption but believed that it was not a reason for the low take-up.

“We conducted a survey of our members last year and were glad to see so many of them were tax compliant,” she said.