Childcare costs help

tumboodle

Icequeen99 wrote: »

That wouldn't work on a compliance check by HMRC. Step 4 - they don't ask for invoices, they ask for receipts and bank statements. Similarly from the childcare provider they have the power to ask for receipts and bank statements.

There are lots of ways to 'scam' tax credits, of course you can if you make things up and lie on your claim. But it's benefit fraud.

IQ

Heh? There is no fraud involved. Nothing is being made up. It is common practice in business to issue credit notes if they realise that the payment is not to be made - there is no point in the provider paying tax on the £300 when they have only had a payment of £210.

The care provider of course can account for everything - she can produce a copy of the original invoice, a copy of the credit note and a copy of the bank statements showing the £210 being paid over.

The mum can hand over the original invoice for £300 and a copy of their bank statements that show only £210 was paid leaving a debt of £90 still outstanding to the care provider. She can also send a copy of the credit note of £90 that the provider issued.

Legally the mum is required to pay £300, but still owes £90 which she would argue that she is trying to pay but can't.

CTC are only interested in the child care charges based on the original invoice. The mum is still responsible for paying the missing £90 until the care provider gets fed up with waiting for it and eventually accepts, quite reluctantly, that the money will never be paid over.

zagfles

In case anyone is daft enough to believe this tedious troll, see http://www.hmrc.gov.uk/manuals/tctmanual/TCTM02630.htm

Relevant childcare charges are charges incurred and paid by the claimant for childcare provided for any child for which they are responsible

Icequeen99

tumboodle wrote: »

Heh? There is no fraud involved. Nothing is being made up. It is common practice in business to issue credit notes if they realise that the payment is not to be made - there is no point in the provider paying tax on the £300 when they have only had a payment of £210.

The care provider of course can account for everything - she can produce a copy of the original invoice, a copy of the credit note and a copy of the bank statements showing the £210 being paid over.

The mum can hand over the original invoice for £300 and a copy of their bank statements that show only £210 was paid leaving a debt of £90 still outstanding to the care provider. She can also send a copy of the credit note of £90 that the provider issued.

Legally the mum is required to pay £300, but still owes £90 which she would argue that she is trying to pay but can't.

CTC are only interested in the child care charges based on the original invoice. The mum is still responsible for paying the missing £90 until the care provider gets fed up with waiting for it and eventually accepts, quite reluctantly, that the money will never be paid over.

See the link Zagfles posted.

Firstly, childcare costs are not part of CTC they are part of WTC.

Secondly, they are not only interested in the invoice amount. They are interested in the actual amount paid. If you read on from the link Zagfles has posted, there is some guidance on arrears - they will allow a little grace period but after that they won't allow the person to claim for the costs because they are not being paid.

So to claim them when you are not paying them would indeed be fraud from the WTC claimant's perspective.

IQ

tumboodle

zagfles wrote: »

In case anyone is daft enough to believe this tedious troll, see http://www.hmrc.gov.uk/manuals/tctmanual/TCTM02630.htm

I think that you will find that the child care charges accepted by HMRC are those that have been invoiced by the provider and are to be paid by the mum.

Are you actually suggesting that if a mum cannot meet the full amount of that invoice value, they will only be given 70% (£147) of the amount actually paid over (£210)? If that is the case when would the mum get the other 70% (£63) of the invoice value - when she pays the £90 debt?

Utter rubbish - HMRC would be buried under a mountain of paperwork for all of those that don't, won't or can't pay the other 30% in one go.
How many mums have debts owing to care providers? Do you suggest that every time they hand over a £5 note to come off the arrears that they are required to notify HMRC so that they can get a payment of 70% of it?
HMRC are only interested in what the mum has to pay, not what has actually been paid.

You are reading into that statement something that isn't the case.

However you do raise a point - I will seek confirmation from HMRC in the morning as to the actual evidence they use, beit the amount actually paid over or the invoice value and post the reply later.

tumboodle

Icequeen99 wrote: »

So to claim them when you are not paying them would indeed be fraud from the WTC claimant's perspective.

IQ

You would claim what you are liable to pay. No one has said that they aren't to be paid by the mum. What I said was that there is a debt outstanding to the provider and the provider eventually decides that they won't or can't collect that debt and to avoid having to pay tax on what they have not received, they would issue a credit note.

I think that you are trying to suggest that there is a conspiracy between the provider and the mum to gain 100% of the child costs paid for by the state - not at all - HMRC would have a job in trying to prove that.

NYM

It is a legal requirement to keep full and accurate records of income and expenses from self-employment.

Credit Notes should never be issued to off set a debt...‘Bad Debt’ needs to be written off in accounts as an expense.

FBaby

There have been posts here about claimants being investigated for doing exactly what you are suggesting. Of course you can do it, but you might not get away with it as easily as you seem to think, and however you put it, it is fraud.

I do agree with you that paying £13K in childcare when only working 16 hours and earning £5K is ludicrous, but there is a culture in this country that single mothers have it so hard, they couldn't possibly be expected to work like others. I have friends who although married have the same demands put upon them than single mothers because their husbands work away or have very long commute, yet there are not given the same consideration.

Icequeen99

tumboodle wrote: »

I think that you will find that the child care charges accepted by HMRC are those that have been invoiced by the provider and are to be paid by the mum.

Are you actually suggesting that if a mum cannot meet the full amount of that invoice value, they will only be given 70% (£147) of the amount actually paid over (£210)? If that is the case when would the mum get the other 70% (£63) of the invoice value - when she pays the £90 debt?

Utter rubbish - HMRC would be buried under a mountain of paperwork for all of those that don't, won't or can't pay the other 30% in one go.
How many mums have debts owing to care providers? Do you suggest that every time they hand over a £5 note to come off the arrears that they are required to notify HMRC so that they can get a payment of 70% of it?
HMRC are only interested in what the mum has to pay, not what has actually been paid.

You are reading into that statement something that isn't the case.

However you do raise a point - I will seek confirmation from HMRC in the morning as to the actual evidence they use, beit the amount actually paid over or the invoice value and post the reply later.

From the compliance manual:

If the customer has got into arrears with the childcare provider you need to consider whether they have been paid or are likely to be paid within a reasonable length of time. Any arrears that have actually been paid must be included in the calculation. If the arrears aren’t going to be paid within a reasonable length of time and preferably during the period of the award you should usually exclude them from the calculation. (This text has been withheld because of exemptions in the Freedom of Information Act 2000)

So no, it isn't the invoice amount that is relevant, it is the amount paid.

IQ