This guest post has been written by Emma who is a Finance Manager for a regional chain of nurseries. She also blogs on personal finance at The Money Whisperer. As a Chartered Accountant,she found that a lot of her mummy friends came to her with financial questions. She undertakes lots of financial research to invest and grow her own family’s wealth and make good financial decisions, so now shares on her blog which seemed an easy extension of this research. It’s important to her that people of her generation who learnt no formal financial literacy at school have access to information so that they can make good choices for themselves and their children.’’
As for me, given that my background is in children’s services I thoroughly agree with Emma and most if not everyone in the sector that the whole funding scheme always badly thought out and implemented appallingly. As usual Government not listening to the experts in the field. So hopefully another blog post outlining the issues and what you can do if affected will add to the voices out there as well as helping parents access any funding.
Tax free childcare or 30 hours funding – what is it all about?
In an effort to help families with the crippling cost of childcare, this year the government has made some major changes to the way that they provide support to working families with their childcare costs. April 2017 saw the launch of the Tax-Free Childcare scheme, whereby eligible families can receive a government top up worth 20p for every 80p contributed by the parent. Last week the government’s somewhat controversial scheme to provide 30 hours of funded childcare to eligible working parents was launched.
Both schemes are administered through the government website; parents apply once and are assessed for both schemes. However, the website has been dogged with technical problems since it was launched. Huge amounts of downtime have resulted in parents being unable to apply, or apply and then find themselves completely locked out of their accounts.
Within days of launch in April, a number of childcare providers reported not being able to sign up to Tax-Free Childcare, either because they didn’t receive a temporary password from HMRC, or the one they were sent didn’t work. In other cases, childcare providers were unfamiliar with their Unique Tax Reference which is required for the registration process. Charity-run settings with no Unique Tax Reference were left unable to set up an account also. This left many parents with no ability to use the service to pay their childcare fees – without a provider account they had nowhere to send their money to.
Common issues encountered by parents using the Tax-Free Childcare service include:
• delays in receiving passwords to enter the site
• failure to be able to log in using the usernames and passwords supplied after successful registration
• technical downtime – often with the landing page stating ‘‘We’re experiencing technical difficulties’ and ‘We don’t know when the service will be available again.’
• delays in receiving the government’s 20% top up in to their Tax-Free Childcare accounts resulting in payments to childcare providers being made late
• payments being sent from the parent’s Tax-Free Childcare account but not reaching the childcare provider’s account
• some even reported being advised their child did not exist!
With childcare providers requesting payment from parents who had money tied up in a Tax-Free Childcare account which they couldn’t access, some parents had to find the money from elsewhere to make a second payment directly to their provider to ensure they were paid.
The technical glitches have continued for months. With many parents leaving it to the last minute to apply for the eligibility code required to access 30 hours of funding, it has left many without a code on the deadline date of 31 August 2017. It is reported that of the 200,000 families signed up for the 30 hours funding, an estimated 80,000 have had difficulties getting an eligibility code.
What can parents do to complain?
Tax-free childcare accounts
New guidance published on the gov.uk website under the heading ‘Childcare Service Compensation’ states that if you have been unable to access tax free childcare through your childcare account for technical reasons, you may be able to claim compensation. You may be eligible for these payments if you:
• have been unable to complete your tax-free childcare,
• have been unable to access your childcare account, or
• have not received a decision about whether you are eligible, without an explanation, for more than 20 days.
To make a claim:
Send the following to Childcare Service, HM Revenue and Customs, BX9 1GR:
2. Home Address
3. National Insurance Number
4. Copies of their receipts for payments to your childcare provider
5. Bank name, sort code and account number
6. A brief description of the issues you’ve had
You may be able to get the government top-up as a one-off payment. HMRC will also consider refunding any reasonable costs directly caused by their mistakes or unreasonable delays.
30 hours funding
The deadline for applying for 30 hours funding for childcare in September was 31 August 2017. However, due to the problems with the national computer system there may be some families who started their application process before 31 August but did not received their eligibility code in time.
To make a claim:
• Contact the childcare service helpline on 0300 123 4097 to receive a temporary code beginning with ‘11’.
• Give this code to your preferred childcare provider along with your national insurance number, your date of birth and your child’s date of birth.
• Childcare providers are able to process and verify these temporary codes with your local authority, so as long as your preferred provider has space for you, you may still be able to get a place. You will need to be quick however as most local authorities require providers to inform them of their headcount figures by late September.