Parents still experiencing technical problems with Tax-Free Childcare as Government looks to promote scheme
Katy Morton
Friday, April 29, 2022
Parents are continuing to experience problems with the Tax-Free Childcare system as the Government looks to increase take-up of the scheme.
Issues reported by users of Tax-Free Childcare in the last six weeks or so include money disappearing from their accounts temporarily and funds being returned to a parents’ bank account without their knowledge.
When Nursery World contacted the Childcare Service helpline, they said the system had been experiencing technical difficulties up until this week, meaning payments were taking longer to appear in accounts or to reach childcare providers.
However, HMRC denied there were any ongoing issues with the Tax-Free Childcare system which it operates, but did say there were problems with the ‘RBS’ side of the system, not controlled by HMRC, at the end of March that only impacted a few parents who were notified.
Historically, the Tax-Free Childcare system has been plagued with technical glitches on and off since its launch in April 2017.
The latest problems come as the Government looks at ways to boost take-up of its Tax-Free Childcare scheme, with reports suggesting ministers are considering launching a new campaign.
Research published by HMRC earlier this year found approximately 328,000 families used Tax-Free Childcare for 384,000 children in December 2021. However, 1.3 million families are thought to be eligible for the scheme, which allows working parents to claim back £2,000 a year on childcare costs. This has resulted in an underspend of billions of pounds and is despite numerous attempts to promote the scheme.
One in five parents polled by HMRC said they did not know they met the eligibility criteria – parents are only eligible if all adults in a household work and earn a minimum of the equivalent of 16 hours a week at the national minimum wage and less than £100,000 a year.
Responding to reports that the Government is considering launching a campaign to drive up the numbers using Tax-Free Childcare, the National Day Nurseries Association (NDNA) said what was needed was an ‘overhaul of the system’.
