Call for childcare tax credit

Accountants have called for the introduction of a €1,200 childcare tax credit.

In a pre-Budget submission, the Consultative Committee of Accountancy Bodies - Ireland said the annual tax credit suggests the credit be made available to parents of children up to the age of 14 as part of a package to improve the working environment for indigenous business.

The measure, if adopted, would cost the Exchequer up to €600 million.

"There is a general consensus emerging that the problems associated with childcare issues are one of the major impediments to doing business in Ireland," said Brian Keegan, director of taxation at the Institute of Chartered Accountants in Ireland.

He said the relief should be paid in the same way as mortgage tax relief, ensuring it was also available to people outside the income tax net.

"While the proposal we are making is a significant one, we have arrived at it after examining comparative regimes in other EU states," said Mr Keegan.

The submission also calls for a doubling of the VAT exemption threshold.

The committee noted that VAT thresholds had not been increased since 1994. "We believe the current low VAT levels represent an impediment to the development of the small business sector, particularly in the early years of company set-ups," said Mr Keegan yesterday.

He suggested that increasing the thresholds to "a sensible level" could minimise the allure of the black market.