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Molly Maid supports Tories' call for tax breaks for those hiring cleaners
Molly Maid supports Tory Minister, David Gauke's view on tax avoidance which was revealed on Tuesday. As the UK's largest employer in the UK's billion pound domestic cleaning sector, Molly Maid also says Prime Minister David Cameron's idea of implementing family-favouring tax policies - which would allow homeowners to write off a proportion of their house cleaning bills - would create thousands of jobs and millions in new Government revenues.
Molly Maid Chief Executive, Pam Bader OBE, strongly believes that as many as 250,000 new jobs could be created and GBP500 million collected in additional Government revenue through VAT, National Insurance contributions and income tax. To Pam and her 1,000 strong workforce competing in an industry that is said to be 98% dominated by the 'black market', David Cameron's remarks are music to her ears.
"Most people don't think that housecleaning in Britain is as large an industry as it is or that it could play such a pivotal role in helping to get the country's finances back in order," says Pam from her Head Office in Maidenhead, Berkshire.
"In 2010, we calculated the industry to be worth just over GBP1.6 billion, but surprisingly more than GBP1.5 billion is carried out by black market cleaners."
As a mother of three and grandmother, who has had to balance the demands of building a business with bringing up a family, Pam is a firm believer that working mothers need a helping hand.
"Most working mothers spend 40 hours at paid work and as many as 40 hours working in their home and it adds up," she says. But what motivates her even more is the prospect that such an initiative would also help to shift much of her industry from the black market into legitimate, tax-paying work.
"The Swedish tax model for purchasing domestic help has literally transformed an entire industry," she argues. "It has moved domestic cleaning work into the above ground economy and by doing so has created thousands of jobs and new government revenues."
Research commissioned through opinion pollster MORI by Molly Maid in 2010 shows that 6% of all households in Britain pay to have their home cleaned, but only a small fraction of these households (less than 2%) pay a legitimate company like hers to have it done. The research by Molly Maid shows that HMRC is missing out on some GBP1.575 billion currently paid to individuals and firms who do not pay VAT and almost certainly do not pay tax on their income. That adds up to a considerable amount of money says Pam; money that she indicates could be used to help pay for increased tax credits for child care or programmes to support more women entering the workforce.
"I whole heartedly support Mr Cameron in his endeavours of bringing this to the fore and welcome further investigation of this area. It is a debate that we have needed for a long time," she says.
With more than 25 years of successful operations in the UK, Pam is hopeful that Molly Maid is well placed to provide the Government with some useful insight into the industry in a bid to help reduce the amount of tax evasion that she has witnessed being rampant throughout the industry for years... tax evasion that the Chancellor recently described in the Budget speech as 'morally repugnant'.
"No one asks their cleaner if they are paying taxes on the money they earn, but if they knew how much they earned annually I am quite sure they would change their mind. We estimate that 'black market' cleaners could be earning as much as GBP18,000 per year, tax free, for less than 20 hours' work a week. Anyone making this amount of money should be contributing to the tax system."
Molly Maid is one of the world's largest professional domestic cleaning services, carrying out 1.8 million home cleans every year worldwide. Initially founded in Canada in 1979, it currently trades in Canada, USA, Japan, Portugal, and the UK. Staff are fully insured, work in teams of two and arrive in branded cars, bringing with them all the necessary cleaning equipment and supplies. The organisation came to the UK in 1984 and has grown from a standing start to 71 Franchise Owners nationwide and a current annual turnover of over GBP15.5 million in 2011.
26th July 2012