Nursery World - Missing the mark: childcare tax credit

The new childcare tax credit may be failing to hit its target of helping unemployed parents into work, while bogus claims cause problems for carers. Mary Evans reports

The Childcare Tax Credit has been running for six months, but early years professionals from across the spectrum of providers report evidence of low rates of approval for parents, problems over the rigidity of the rules, and even fraud.

The Inland Revenue is now conducting research into the scale of the problem and childcare leaders expect the Government to take action to prevent parents from making dishonest claims.

The Childcare Tax Credit element of Working Families Tax Credit (WFTC) was introduced to encourage unemployed parents back to work by helping them with their childcare costs. Initially it was allocated in cash, but from the new tax year, starting today, it will be paid through wage packets.

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