In this response, the Faculty's comments are confined to this interaction.

"We are concerned that childcare policy is being formulated without proper consideration of the tax consequences or the impact on employers.

"We believe that the changes suggested in the consultation paper favour employees at the expense of the self-employed. Most of the initiatives, such as vouchers for childcare and extended and flexible parental leave, are aimed at employees but will not be available to the self-employed. Tax relief should be available for self-employed women or men who need their children looked after so that they can work to support their families, in the same way as it is for employees

"In the interests of tax simplicity and flexibility and choice for working parents, we ask the government to reconsider full tax relief for childcare costs. The paper correctly identifies that childcare costs vary by geographical location and by age of child. Tax relief for what childcare actually costs would make a link between work and support for the cost of childcare, whilst relating the amount of relief directly to cost.

"Tax relief for training remains an area which is in need of urgent review. There are particular problems where an individual pays for his or her own training while unemployed, in order to help himself back into the workforce. There is no tax relief for such costs against income when the individual starts to get work. This is a disincentive to those showing such initiative, and the lack of tax relief often comes a surprise when they later find employment or seek to use their new skills in a new self employment.

"We welcome the Government’s review of the statutory payment mechanisms, including considering the case for transferring payment of SMP, SAP, SPP and MA from employers to HMRC. We believe that this will be widely welcomed by business, as these payments are a major burden on employers.

"We support the suggestion that entitlement to the working tax credit could be extended to parents who work less than 16 hours a week.

"We disagree with the premise that Government support should also be denied where payments are made on a commercial basis to family members."

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