Back to Listings

HMRC confirms tax-free childcare glitch

By Rachel Lawler
 
child and parents
HMRC has confirmed that the tax-free childcare service has experienced technical issues in the past week.
 
Several users reported on social media that they were having difficulty making payments in the past week, leaving childcare providers with overdue fees.
 
Delays to payments
A spokesperson from HMRC told Under 5: “We have identified an issue which has resulted in delays to some tax-free childcare payments.
 
“We apologise for the inconvenience that this has caused to parents and providers.”
 
HMRC also said that the affected payments have been processed and that childcare providers should receive their payments on 7 November.
 
Those affected by the glitch have been contacted by email.
 
Unanswered questions
Neil Leitch, chief executive of the Alliance, said: "There are several questions which need to be answered here: how many providers and parents have been affected? What kind of financial impact has this has? And will HMRC guarantee that there will be appropriate compensation for providers, especially in cases where non-payment led to bank fees?
 
"It's appalling, but sadly not surprising, to think that those providers who have been struggling to break even because of government underfunding may have ended up even further in the red because of government mismanagement. The tax-free childcare scheme has struggled with technical issues since it was rolled out, often meaning many parents and providers have had to spend inordinate amounts of time on the phone to the helpline to do the simplest of tasks, such as registering."
 
"What makes this all the more incredible is that, just as this was going on, it was confirmed that HMRC were returning a so-called underspend of £600m to the Treasury. We can't carry on like this: if it wasn't already clear that more investment was needed across the early years, it surely is now."
 
Last year, shortly after the launch of tax-free childcare, the government's Childcare Service website experience significant technical issues, leading to some parents being paid compensation.
 
Find out more