HMRC has posted 'Childcare Service compensation': it is offering parents compensation if they have been subjected to various technical difficulties in relation to its online Tax-free Childcare account.

Problems with the service include technical issues, mistakes and unreasonable delays.

Parents affected by technical issues may be able to:

  • Ask the government for a top-up as a one-off payment for Tax-Free Childcare.
  • Apply for reimbursement of any reasonable costs directly caused by the service not working properly.

HMRC’s eligibility for compensation

If you have:

  • been unable to complete your application for Tax-Free Childcare
  • been unable to access your Childcare account
  • not received a decision about if you’re eligible, without explanation, for more than 20 days

Affected individuals should fill in an online application for compensation. Unlike most of their online forms, HMRC are also showing the information you will need to complete the form before you start.

Tax-free childcare: background

Two schemes are principally affected:

  • Tax free childcare, where the government pays £2 for every £8 paid to approved childcare providers
  • 30 hours free childcare scheme (1,140 per year) is open to parents of three and four year olds who are either in work or earning at least the minimum wage, but no more than £100,000 each.

Note: To qualify for 30 hours free childcare in September you must have received your code by 31 August. Affected individuals should, therefore, call HMRC on 0300 123 4097 to accelerate the process.

The announcement does not indicate the level of compensation. If the somewhat desultory amounts offered by HMRC for errors in normal cases is anything to go by, this will not be large, but questions have been asked in parliament.



Tax-free childcare or childcare vouchers?

HMRC: Childcare Services compensation