concentrix help

iammumtoone

UPDATE

Finally sent my form off. I have been so stressed out about it.

I spoke to them on the phone and was told I have to give my average weekly costs for the tax year. The big box I had to fill out was to explain how I came to this figure, that was easy I just added up the costs for the year and divided by 52!

The actual costs are lower than my estimate - this is where I get confused, they are not interested and do not want to know how I worked out my estimated costs at the beginning of the year - this information I would have thought would be vital to determine if I intended to commit fraud or not.

I am still worried as my actual costs are less but I wasn't allowed to 'defend' myself on how I came to estimate wrong

Icequeen99

iammumtoone wrote: »

UPDATE

Finally sent my form off. I have been so stressed out about it.

I spoke to them on the phone and was told I have to give my average weekly costs for the tax year. The big box I had to fill out was to explain how I came to this figure, that was easy I just added up the costs for the year and divided by 52!

The actual costs are lower than my estimate - this is where I get confused, they are not interested and do not want to know how I worked out my estimated costs at the beginning of the year - this information I would have thought would be vital to determine if I intended to commit fraud or not.

I am still worried as my actual costs are less but I wasn't allowed to 'defend' myself on how I came to estimate wrong

If you followed the correct process for estimating and checked that estimate throughout the year - as detailed in WTC 5 then it should be fine. However in my experience some staff seem to think it is actual costs that should be used and that is certainly not the case.

IQ

iammumtoone

Icequeen99 wrote: »

If you followed the correct process for estimating and checked that estimate throughout the year - as detailed in WTC 5 then it should be fine. However in my experience some staff seem to think it is actual costs that should be used and that is certainly not the case.

IQ

Yes I did at the being of the year, unfortunately once I told them my estimates I didn't keep my workings out (lesson learnt there ). I spend a lot of time re-doing this to get to the figure that I originally put down, and they don't even want that information :mad:

jetplane

OP I did not reply to this as I assumed you were receiving help when the thread went quiet. I think you may be overthinking this.

When anyone makes a claim they are expected to keep documents and provide information whenever asked, this verification process is true of any benefit claimed. Hence why an enquiry letter does not mean they are investigating or suspecting fraud.

At the start of the year you estimated your child care costs by calculating the expected annual amount and dividing by 52, that's ok, it is an accepted way to calculate costs. When you do this you are expected to compare actual costs with estimates during the year.

Your actual child care costs were less due to receiving more help from relatives and your working pattern, is that right? Did the costs go up or down by more than an average of £10 a week for a period of four weeks or more? From memory the WTC5 has a few examples of this. If so did you notify HMRC?

Part E asks if there has been any changes, it sounds as though the only change which may have affected you is the change in costs, unless your son was not in registered childcare for a period of time.

If no changes occured you complete part E, otherwise you would fill in part C and D, you dont need to defend yourself you just need the facts, how did you estimate the costs, how much did you actually pay and the date the changes happened.

What is the difference between the estimate and actual child care costs is it a big difference?

Icequeen99

jetplane wrote: »

OP I did not reply to this as I assumed you were receiving help when the thread went quiet. I think you may be overthinking this.

When anyone makes a claim they are expected to keep documents and provide information whenever asked, this verification process is true of any benefit claimed. Hence why an enquiry letter does not mean they are investigating or suspecting fraud.

At the start of the year you estimated your child care costs by calculating the expected annual amount and dividing by 52, that's ok, it is an accepted way to calculate costs. When you do this you are expected to compare actual costs with estimates during the year.

Can you point me (and the OP) to anything that says you have to compare actual costs with estimates during the year?

The legislation certainly doesn't require it and this is where a lot of HMRC staff go wrong by simply focusing on what were the actual costs. Whilst it makes sense, it isn't how they wrote the rules.

if you have no historic childcare cost data at the point you start claiming, you look forward 52 weeks and estimate your costs. That estimated figure then stays as the figure on the award unless there is a change of more than £10.

In working out whether there has been a change - you estimate forward again for 52 weeks.

There is no comparison with actual costs - although your actual costs may suggest that your estimate needs revising of course.

IQ

jetplane

I did not say that HMRC compare actual cost, I meant the claimant, but did not explain that clearly enough, if the claimant does not compare actual costs how will they know whether they vary enough to be a relevant change of circumstances?

As an example; a parent estimates their costs at £120 week for 3 days care, for whatever reason they do not use all of that care for 4 weeks and only actually pay £100, then that is not notifiable. However if that parent regularly uses other forms of childcare over a few months and this results in their actual weekly payment being £100 then that is a change of circumstances and will affect their payments. How would you do this if you did not monitor your actual costs?

Would it be acceptable for a parent to estimate £7000 costs per year and actually pay £5000? This a genuine question I'm not being flippant.

Icequeen99

jetplane wrote: »

I did not say that HMRC compare actual cost, I meant the claimant, but did not explain that clearly enough, if the claimant does not compare actual costs how will they know whether they vary enough to be a relevant change of circumstances?

As an example; a parent estimates their costs at £120 week for 3 days care, for whatever reason they do not use all of that care for 4 weeks and only actually pay £100, then that is not notifiable. However if that parent regularly uses other forms of childcare over a few months and this results in their actual weekly payment being £100 then that is a change of circumstances and will affect their payments. How would you do this if you did not monitor your actual costs?

Would it be acceptable for a parent to estimate £7000 costs per year and actually pay £5000? This a genuine question I'm not being flippant.

To answer your last question - technically yes under the legislation that situation is entirely possible.

For example, take a situation where someone estimates their costs as £100 a week for 26 weeks and then £200 a week for the next 26 weeks - giving a weekly average of £150.

However at the start of the next 26 weeks, their parents decide to give up work and offer to look after the children. So costs fall to zero and that is notified to HMRC and the childcare element stops.

However for the period April to October - that person has received 3,900 of childcare support but their actual costs would only be £2600.

I agree though that actual costs are relevant to looking at your estimate - but it is only if the 52 week forward average changes that you report a change. The change looks at average weekly childcare costs, so expects you to keep looking forward 52 weeks and making sure the average hasn't changed.

The legislation is a mess to be honest, so complicated and hard to understand.

IQ

jetplane

Thanks, it is a minefield.

To clarify, with your example, at the end of year tax credit review would none of those childcare payments be recoverable as an overpayment?

Are overpayments restricted to Working And Child Tax Credit payments but not childcare costs?

Icequeen99

jetplane wrote: »

Thanks, it is a minefield.

To clarify, with your example, at the end of year tax credit review would none of those childcare payments be recoverable as an overpayment?

Are overpayments restricted to Working And Child Tax Credit payments but not childcare costs?

There wouldn't be an overpayment so recovery isn't an issue. The costs were calculated as per the legislation, which doesn't look at what was actually paid out. So in this case the £150 a week was correct.