Bernard Allen (Cork North Central, Fine Gael)
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Question 148: To ask the Minister for Finance if, in relation to the child care scheme, in the event of a minder exceeding the €10,000 tax free limit, they are taxed on the whole amount; and if they will be allowed to offset expenses such as heating, lighting and food against the amount earned. [39800/06]

Brian Cowen (Laois-Offaly, Fianna Fail)
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Section 13 of the Finance Act 2006 provided for a scheme of tax relief for income received from the provision of certain childcare services. The scheme operates broadly on the basis that if gross annual income from the provision of childcare services in a person's own home does not exceed €10,000 in a tax year, the income is fully exempt from tax. In determining whether the income level exceeds €10,000 no account can be taken of deductions or expenses of any kind.

Where the income from such childcare services exceeds €10,000 the exemption does not apply and the entire amount is taxable in the normal way. However, in these circumstances, the childcare service provider can deduct all allowable expenses such as the cost of additional heating, lighting and food etc expended in the course of earning the childminding income.