SCMA has been actively raising concerns and calling upon HMRC to reconsider its unexpected changes to the long-established ‘wear and tear’ expense for childminders under Making Tax Digital for Income Tax (MTD).
We joined a co-ordinated effort to formally write to HMRC alongside other organisations that support and represent childminders across the UK – as well as inviting childminders to email their MP/MSP directly. As a result, the issue was raised in the Scottish and UK Parliaments, with many representatives recognising the adverse impact this will have on childminders (and children and families relying on your services).
SCMA has received a positive response from the Scottish Government outlining its support for childminders in Scotland and backing our calls for HMRC and the Treasury to reverse their decision on changes to the wear and tear allowance.
Scottish Government Response to SCMA
Our concerns were raised within First Minister’s Questions on 22 January and the Scottish Government has now written to SCMA to confirm that they share a number of our concerns and, most significantly, that Shona Robison MSP, Cabinet Secretary for Finance and Local Government, and Natalie Don-Innes MSP, Minister for Children, Young People, Children and the Promise, have also written formally to the Treasury requesting that the intended change is paused.
We believe this is a very positive development and we would urge HMRC to actively listen to childminders around Scotland, the Scottish Government and other MPs and MSPs who have been writing to them. We repeat our call for HMRC to pause the implementation of this rushed measure and to maintain the existing ‘wear and tear’ agreement. If they do proceed with the intended change we believe this would increase the administrative burden on childminders, reduce their income and cause many to consider leaving the childminding workforce. This would also undermine the high level of ongoing national and local joined-up working underway in Scotland to support childminder retention and recruitment and risk reducing much-needed childminding places for families at a time when we are already experiencing acute shortages of childcare around Scotland.
In a response to SCMA, Ms Natalie Don-Innes, Minister for Children, Young People and The Promise, said:
“Thank you for your letter of the 19th of January regarding the HMRC change to childminders’ tax-free ‘wear and tear’ allowance. Thank you for bringing this issue to my attention and for your efforts already in discussing this with HMRC directly.
“Whilst Making Tax Digital is a long-standing HMRC strategy and I respect that decisions on self-assessment for income tax are a matter reserved to the UK Government, given the devolved nature of childminding legislation and regulation, it is understandable that Scottish childminders are disappointed that they were not consulted by the UK Government on the impacts to changing the wear and tear allowance. I understand the concerns the sector has raised with regards to increased administrative work for childminders as a result of this change, when the evidence is clear that the administration involved in running a childminding business has been a factor in childminders leaving the profession.
“The Scottish Government remains committed to the sustainability of the childminding sector, investing in recruitment and support for existing childminders, and I want to thank you again for your ongoing support to childminders in Scotland.
“I look forward to continuing our work together to strengthen and support our vital childminding sector, and I would be grateful if you could share this letter with the many SCMA members who have taken the trouble to write to the Scottish Government on this issue.”
The Scottish Government has asked SCMA to share their response to us with the many SCMA members who have also contacted the Scottish Government regarding this matter.
Read the
full response letter from the Scottish Government to Graeme McAlister, Chief Executive, SCMA.
UK-Wide Survey of the Workforce
In addition, a UK-wide survey was launched as part of collective efforts to collect vial evidence, data and feedback from the childminding workforce, with 42% of SCMA members from across Scotland responding.
The survey results will be shared this week, and most importantly directing this evidence to HMRC and the decision-makers at a national level – alongside our colleagues and organisations across the UK – to demonstrate the risk and detrimental impact that these changes could have on the childminding workforce.
SCMA thanks childminders for your time, support and efforts over the past few weeks in providing feedback, writing to MSPs/MPs directly, as well as contributing to the survey response on this matter – it has not gone unnoticed.