Glitch leaves childminders unpaid for a week

By Felicity Hannah
Wake up to Money, BBC Radio 5 live

Image source, Getty Images

A glitch in a childcare payment system run by the tax office has left many nurseries and childminders waiting more than a week for their money.

The problems came after 22,000 payments made through HM Revenue & Customs' Tax-Free Childcare system were delayed.

The tax office has apologised and says all payments have now been made.

However, some childminders have contacted the BBC to complain that they are still waiting for payments to reach them.


Emma, a registered childminder in Bedfordshire, said: "I still haven't received payment. I'm furious as I have my own bills to pay and so I'm currently really struggling.

"How can they justify taking over a week to send it through? I'm also away this week on my first holiday in six months and I've come away with hardly any money thanks to this delayed payment. I think it's disgusting that yet again the childminder is left at a loss."

The Tax-Free Childcare system is planned to gradually replace the childcare vouchers scheme, which has now been closed to new applicants.

It allows parents and carers to pay money into an online account that is then topped up with reimbursed tax: 20p is added by the government for every 80p paid in.

Parents then pay childcare providers and settings through the scheme's website. It is relied on by more than 235,000 parents in the UK and is worth up to £2,000 per child a year.

Image source, Getty Images

But Tax-Free Childcare has been plagued with technical problems. This latest issue has affected payments made between 30 October and 1 November, and meant that parents' accounts showed the money as paid when in fact it had not.

Many childminders were only paid on Wednesday 7 November but some say they have still not received their money.

"I was only out of pocket by £300, so not as extreme as some others," says registered childminder Kelly. "I could survive and I did manage to pay my bills, but this is only because my partner and I share money. If we had separate finances £300 would have disrupted my ability to meet the bills.

"The payments are usually delayed every month. We can be waiting up to five days, which in itself is too long, but this fiasco is just another kick in the teeth for childcare providers.

"If childminders and providers cannot rely on payments to reach us in time they will simply stop taking them. Parents will lose out on much needed help and we will lose out on business."

'More investment needed'

Neil Leitch, chief executive of the Pre-School Learning Alliance, said technical issues had affected the scheme, meaning some parents and providers have been forced to spend long amounts of time calling the helpline for 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," he said.

An HMRC spokesperson said: "We identified an issue earlier this week which resulted in delays to some Tax-Free Childcare payments. This issue has now been resolved, and the affected payments were received by childcare providers on 7 November. We apologise for the inconvenience that this has caused to parents and providers, and we have contacted those affected by email."

The tax office says that if anyone has been left out of pocket as a result of late payment fees or charges then it will consider compensation on a case-by-case basis.

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