The government’s tax-free childcare scheme has run into problems. What are the problems and what can you do about it?
Tax-free childcare complaints
The government launched its tax-free childcare scheme in April 2017. But there have been some problems with thousands of parents saying they can’t claim the childcare they’re entitled to. So, what problems are parents facing with the tax-free childcare website and what – if anything – can parents do about it?
The tax-free childcare scheme has been designed by the government to help ease the costs of childcare for working parents who have children up to the age of 12, or up to the age of 17 if they are disabled. It can only be used to pay official providers of childcare so in England, for example, the provider must be Ofsted registered.
- Parents need to open a childcare account online and for every £8 they pay into the account, the government will pay in an extra £2.
- Parents can get up to £2,000 from the government per child per year towards their childcare costs, or up to £4,000 per child if their child is disabled.
What are the problems?
Since the launch of the tax-free child care scheme in April 2017, parents and childcare providers have been reporting problems with the HMRC Childcare Choices website. The government says that 320,000 parents have opened accounts so far, and only 2% have faced problems – however, that is still thousands of parents who have been affected. The problems have included:
- Some parents have had money stuck in tax-free childcare accounts, leaving them unable to pay their nursery bills.
- Some parents have struggled to apply for or reconfirm their tax-free childcare online, which is something the government asks parents to do every three months.
SAVVY TIP: Once you’ve registered for your tax-free childcare, you have to confirm that you’re still eligible every three months using your childcare service account. You’ll be reminded to do this, four weeks before the reconfirmation deadline.
Nurseries say they’ve had to devote hours to help parents resolve these issues. The nurseries say they’ve had to call the government telephone helpline repeatedly to try and get answers. That time spent is something they can’t claim any money for.
Many parents have also had to rely on the goodwill of their childcare provider to keep looking after their children while they are at work, until compensation payments come through.
Purnima Tanuku OBE, Chief Executive of National Day Nurseries Association says:
“Since the Childcare Choices website went live it has proved extremely problematic.
Too many nurseries are saying that they have parents who are struggling both to register and reconfirm their eligibility, something they must do every three months.
We also had member nurseries who had taken months to be able to register – for one nursery in London it took more than a year before HMRC was able to resolve a simple issue. Their parents who had signed up for tax-free childcare were unable to use this towards their child’s place at that nursery.
Our members say that this whole system is causing them a huge amount of administration even when the system goes well.”
The National Day Nurseries Association say they have been flagging up issues on a regular basis with HMRC and that they attend the implementation advisory forum meetings regularly.
What can parents do about it?
If you are experiencing problems with the tax-free childcare website, you can call HMRC on 0300 123 4097. Their opening times are: Monday to Friday 8am to 8pm, Saturday 8am to 4pm and Sunday and bank holidays 10am to 4pm.
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