Early Years NewsNews

Are HMRC Ready for Tax Free Childcare?

Well not quite it would sees300_TFC_screenshot_960x640m, but that’s not necessarily a bad thing as they are at least listening to what is going to be required to support early years providers in using the systems that are in place.

During an event in March, I posed some questions to HMRC via their representative who was giving us a presentation on the new Tax Free Childcare Accounts. I was concerned about the practical arrangements in respect to our receiving payments and how we would be able to reconcile these to each child and to each setting, if that is how the system would work. I expressed my concern about their using information direct from Ofsted, notorious for getting information incorrect. There were no immediate answers to these questions but I was told they would be considered and answered. I heard nothing for 2 months but just last week the HMRC contacted me to discuss the issues I have raised so far. The new scheme is going to be administered by NS&I (National Savings & Investment) so either they or HMRC will be our contact point.

So this is what I know so far:

  • The HMRC will write to each of us to ask us to register with them. They will obtain our information from the Ofsted database – so if you don’t get a letter, then you need to contact them and give them the correct details to send one to
  • The letter will have a Unique Number on it and this will be required to register with them. This will be done online
  • You will have an account online where you will be able to view a statement of payments and (they hope) pending payments.
  • Each child will have their own account, but the parents side may be able to link accounts (this was not too clear)
  • Parents are in charge of making the payments over to us – they will take usual banking timescales to reach us i.e. sometimes same day or within 2 days
  • They will be able to provide up to 16 digits on a bank/building society payment – but have not chosen what system this is or how these digits reconcile to the child.
  • They have not yet worked out how our bank statement reference will link to the online statement. This was our longest discussion point, when I pointed out that they could use the same number for both he was a bit wary of that, but did appreciate that we would not be wanting to have to go through manual lists to reconcile children every time a payment was made. We need to be able to link the online statement to our bank statement – he is looking into this more.
  • Support for providers and parents will be electronic and maybe virtual/online rather then on the telephone

We are keeping in touch and if I have further questions or he needs further feedback we will contact each other.

Make sure you sign up below to get our handy Parent Leaflet to give to your parents – their decision may not be an easy one.

As an aside I also asked if Universal Credit for Childcare would be paid into this account – but sadly no it will not – what a missed opportunity to prevent the fraud we all know occurs!

I’ll post updates as they become known. Tricia

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About the author: Tricia Wellings

Tricia Wellings EYNFF Early Years National Funding Formula Analysis
Tricia qualified as an NNEB and achieved a BA (Hons) in Early Education Studies and Early Years Teacher Status. She obtained her PTLLS and CTTLS in order to teach adults and most recently her A1 assessors award. She has run a group of day nurseries for 18 years and trains her own teams.

Her passion for and knowledge of owning and running a nursery group and the issues within the sector that affect them is second to none. She continues to keep herself updated through regular meetings with PVI groups, Local Authorities, Ofsted Big Conversation and Conferences.

You can find our more about Tricia on her website www.triciawellings.co.uk

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