Tax-Free Childcare runs into problems

Two weeks after its launch, both childcare providers and parents are experiencing difficulties with the Tax-Free Childcare scheme.

A number of providers have reported not being able to sign up to Tax-Free Childcare (TFC), either because they have not received a temporary password from HMRC, or the one they have been sent doesn’t work.

In some cases, settings do not know their Unique Tax Reference – needed for registration – or, in the case of charity-run settings, do not have one.

It follows concerns by the Childcare Voucher Providers Association that parents wanting to use TFC will be ‘left in the lurch’ because only a third of providers in the UK have signed up to the scheme.

Writing on Facebook last week, Elouisa Chowne, manager of Goring Little Fishes Pre-School in West Sussex, said, ‘I have no UTR as we are a charity. I’ve rang four times and they’ve said they will send it through. Still nothing. I have working families who will use this and asked about it. Completely frustrating.’

Another provider in London, Tina Alder, said, ‘Still waiting after being sent an incorrect password months ago.’

Others have been unable to sign up to the scheme because of glitches to the website, which is still in an ‘alpha’ state – an early version of a website. On 9 May, a notification said there were ‘planned technical updates’ and the ‘service will temporarily [be] unavailable’.

However, the following day, the website was still down, with the messages, ‘We’re experiencing technical difficulties’ and ‘We don’t know when the service will be available again.’

Some providers that have successfully registered for TFC have failed to receive payments, despite parents transferring the money to their account through the digital system.

One of these providers is Ali Hart, a childminder in West Sussex. In a comment posted on Facebook on 9 May she said, ‘They [HMRC] can’t tell me when I will get my money. This will be the only parent that pays me via the Government. I’m not accepting other payments [through Tax-Free Childcare] until all the problems are solved.’

Parents have also reported experiencing difficulties, including long delays to accounts being approved and not being able to access accounts.

A parent who took part in the trial of the scheme and whose workplace doesn’t offer vouchers, said out of three payments made to her nursery, just one had gone through smoothly.

On Facebook, she said, ‘I was asked to be part of the trial in January and have had no end of problems with it. Last month, the Government didn’t add the top-up so I had to pay my nursery [by other means] or face a fine. I called the helpline and [logged] the issue – an error on their side. I called again yesterday for an update, but they had no record of my previous call. It’s a shambles. I’m so fed up of it. Don’t even think it’s worth the stress and phone calls.’

An HMRC spokesperson said, ‘The childcare service is a new digital service. New or redesigned digital services are regularly launched on GOV.UK and are continually tested and improved. We urgently investigate any issues encountered by parents or providers as soon as these are brought to our attention.’