Have you Struggled to Access Tax-Free Childcare?

Technical difficulties with Tax-Free Childcare have meant that many parents have been unable to access the scheme. If you are one of these parents, you may be entitled to compensation.

What is Tax-Free Childcare?

‘Tax-Free Childcare’ is one form of financial support available to working parents using registered childcare. It is being rolled out in stages and, at present, can only be accessed by parents who have a child who will be aged under 4 on 31 August 2017, and parents who have a child with a disability. Parents must have earnings of over £120 per week and under £100,000 per year to be eligible.

The scheme will give those eligible households 20 per cent of their registered childcare costs, up to a maximum of £2,000 per child, or £4,000 if the child has a disability. To access the scheme, parents are required to register online with HMRC via www.childcarechoices.gov.uk

Problems Accessing Tax-Free Childcare

Parents and childcare providers have been in touch with us about problems they have had, either accessing the service to register for the scheme, or being able to register for the scheme but not being able to access their accounts to pay money in, or to transfer money out to their childcare provider.

The ‘technical difficulties’, as HMRC have described them, have been so widespread that they have led to Nicky Morgan MP, who chairs the Treasury Committee, to write to HMRC demanding answers. The problems have also resulted in HMRC implementing a compensation scheme for those households who have been affected.

If you have been unable to access Tax-Free Childcare for technical reasons, you may be able to claim compensation. The government will also consider refunding any reasonable costs directly caused by the service not working as it should, mistakes or unreasonable delays.

You may be eligible for these payments if you have:

  • been unable to complete your application for Tax-Free Childcare,
  • been unable to access your childcare account, or
  • not received a decision from HMRC regarding your eligibility, without explanation, for more than 20 days.

To make a claim, you must send HMRC:

  • a brief description of the issues you’ve had,
  • copies of receipts for payments to your childcare provider,
  • your full name,
  • your home address,
  • National Insurance number, and
  • bank name, account number and sort code.

Send this information to:

Childcare Service
HM Revenue and Customs
BX9 1GR

If you are eligible for compensation, HMRC will write to you and make a payment directly into your bank account.

Are there any alternatives?

Tax-Free Childcare may be the best option for some, but in many cases, parents will be better off using Childcare Vouchers, accessing Tax Credits or using a combination of both.

As each family’s situation is different, we strongly advise parents to seek advice now to determine which option is best for them. Call us for free on 028 9267 8200 or email hello@employersforchildcare.org to get confidential, impartial and personalised advice from one of our Advisors.

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