TC childcare - unfair £10/week increase rule

chiefnoodle

I've just been informed by our childcare provider that monthly costs for the new year are increasing by £30.

So I rang HMRC to get them to increase the amount on our claim, because as you will know you can claim 70% of childcare costs back, and 70% of the additional £30 is £252/year.

But (after a long wait) HMRC tells me they have a rule they only update a claim for a £10/week increase, which is about £43 a month, so I fall short of this, and they won't update my claim.

Has anyone got any advice of OK ways of getting the full 70%. For example, would it be OK to stop with the childcare for a few days, tell HMRC we stopped childcare... and then make a new childcare agreement, probably with same provider, and tell HMRC about the "new" arrangement - or is that naughty.

Its just that it doesn't seem fair that other parents paying the same amount get the full 70% back, and I'll be getting about 55% back.

I bet there are people who abuse the system the other way: make a contract with the childcare people for £40/month more than what they intend to pay in the long term. Pay that amount for a couple months, then renegotiate the cost down by £40. As this is a decrease of less than £10/week, they'll be able to continue getting 70% of the previous amount.
E.g. if the real cost is £100/month, they should be getting £70 and paying £30. But they are on the HMRC records as paying £140/month, so they get £98 (70% of £140) and pay... £2! (and if the real cost is even less, then they'd actually be making a profit).

Anyway would very much appreciate any advice on this.

Thanks!

dippy3103

It's your annual costs that matter anyway.
And the abuses of the system are not so much naughty, it would be fraud.

Darksparkle

Just because other people defraud the system doesn't mean you should.

This rule has been in place for years.

There are hundreds if not thousands of childcare compliance checks each year.

dippy3103

And lots of people pay 100 % of their child care costs..

densol_2

chiefnoodle wrote: »

I've just been informed by our childcare provider that monthly costs for the new year are increasing by £30.

So I rang HMRC to get them to increase the amount on our claim, because as you will know you can claim 70% of childcare costs back, and 70% of the additional £30 is £252/year.

But (after a long wait) HMRC tells me they have a rule they only update a claim for a £10/week increase, which is about £43 a month, so I fall short of this, and they won't update my claim.

Has anyone got any advice of OK ways of getting the full 70%. For example, would it be OK to stop with the childcare for a few days, tell HMRC we stopped childcare... and then make a new childcare agreement, probably with same provider, and tell HMRC about the "new" arrangement - or is that naughty.

Its just that it doesn't seem fair that other parents paying the same amount get the full 70% back, and I'll be getting about 55% back.

I bet there are people who abuse the system the other way: make a contract with the childcare people for £40/month more than what they intend to pay in the long term. Pay that amount for a couple months, then renegotiate the cost down by £40. As this is a decrease of less than £10/week, they'll be able to continue getting 70% of the previous amount.
E.g. if the real cost is £100/month, they should be getting £70 and paying £30. But they are on the HMRC records as paying £140/month, so they get £98 (70% of £140) and pay... £2! (and if the real cost is even less, then they'd actually be making a profit).

Anyway would very much appreciate any advice on this.

Thanks!

So all these child minders are all illegally defrauding the system too on a mass scale by colluding with clients AND paying their own tax and national insurance on artificially inflated incomes just so their client can claim a bit of extra tax credits ??? Think about it !

Darksparkle

Why not just ask your childcare provider to actually increase those costs by £10 per week? Then you can legitimately claim for this extra.

stroodes

Not a good idea as that would be unfair to parents paying full costs without help.

[Deleted User]

They will only update childcare costs of less than £10 at renewal time. So you can update it but not until April 2017.

Darksparkle

Deleted_User wrote: »

They will only update childcare costs of less than £10 at renewal time. So you can update it but not until April 2017.

I have never heard of this before.

chiefnoodle

dippy3103 wrote: »

And the abuses of the system are not so much naughty, it would be fraud.

Darksparkle wrote: »

Just because other people defraud the system doesn't mean you should.

Why is this fraud - if I really did stop with the childcare, when I ring and tell them its true. And then I really start again after a few weeks, again when I ring and tell them its true. There will be nothing I don't tell them, how can you call this fraud.
I was only wondering if ethically its not really fair, to which I argue that the whole £10 rule isn't really fair as other parents can get the full 70% so why shouldn't I.

Darksparkle

chiefnoodle wrote: »

Why is this fraud - if I really did stop with the childcare, when I ring and tell them its true. And then I really start again after a few weeks. There will be nothing I don't tell them, how can you call this fraud.
I was only wondering if ethically its not really fair, to which I argue that the whole £10 rule isn't really fair as other parents can get the full 70% so why shouldn't I.

So where will your child go for this few weeks?

To be honest, it doesnt matter if it's fair. Lots of rules around benefits are unfair.