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HMRC delays full rollout of tax-free childcare

By Deri Jones

HMRC has confirmed that the government’s tax-free childcare offer will not be extended to all under 12s until March 2018 – not December 2017 as originally planned. Tax-free childcare for children under six will be offered from 24 November. 
Technical problems
The delay comes after a number of technical problems with HMRC’s Childcare Service website after its launch in March 2017. In August, some parents were offered compensation after being locked out of their tax-free childcare accounts and unable to pay for childcare.
In a statement, the government said: “HMRC recognises that over the summer some parents didn’t receive the intended level of service whilst using the site.” It added that the more gradual rollout would allow them to “manage the volume of applications going through the service”.
Alliance comment
Neil Leitch, chief executive of the Alliance, said: “Given the concerns over the performance of the Childcare Service website over recent month, it’s no surprise that the government has decided to delay the full rollout of tax-free childcare to ensure the system can cope with an increased volume of applications. That said, with many families still struggling with the cost of childcare, parents who had hoped to benefit from the scheme will be understandably disappointed by this delay.”
He added: “With the Childcare Service system now set to service a significantly higher number of parents, it is vital that the government invests what’s needed to deliver and maintain an IT system that both parents and childcare providers are able to use and rely on.”
Funding concerns
Neil also highlighted the ongoing concerns about the government’s funding of the early years sector. He said: “If the government really wants to address the rising cost of childcare for younger children, the most effective action it could take is to fund the early years sector adequately. Evidence has shown that supply-side funding is key to lowering childcare costs for parents, and it is this that the government needs to focus on if it is ever going to be able to deliver on its promise to parents.”
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