Toolkit
Reference materials: Tax credits 'Inside track'
Children and childcare
- Child Tax Credit: Representatives asked for clarification of the processes when children reach 16 and remain in full time education. HMRC confirmed that both Child Benefit (CB) and CTC are stopped if the customer has not informed them that their child(ren) is/are intending to continue in full-time education (FTE) from the 1st September following their 16th birthday. For CB and TC, the emphasis is on the customer to inform HMRC.
The Child Benefit Office do still send a letter to parents in the academic year where the child will reach their 16th birthday. This asks about the intention to continue in FTE and the emphasis is on the customer to reply to the enquiry.
TCO emphasise the need to inform HMRC about FTE intentions on customer award notices for tax credits. The elements section of any award notice for the year in which the change occurs also contains a message relating to the individual child(ren) and the 31 August date.
For customers who have informed HMRC that FTE is set to continue, TCO send a letter in October to give the customer an opportunity to confirm that it has actually happened. This is a prompt for the customer and there is no official requirement for a customer to reply. HMRC will not stop CTC if the customer does not reply to this letter.
[Victoria Todd, LITRG, response 11 May 2009]
- Childcare affordability pilots: HMRC have announced a series of pilots that will take place around childcare. The overall aim of the 5 pilots is to test whether childcare affordability is a barrier to work and whether the changes in the pilots have an impact on this.
A brief outline of the pilots:
(a) 100% Offer: To test whether a 100% rather than 80% childcare subsidy for low income families, with costs paid up to a capped amount which is higher than the current WTC limits, improves take-up of childcare and increases the number of parents entering sustainable employment, compared to the current tax credits system.
(b) Actuals offer: To test whether paying parents their actual monthly childcare costs – rather than a monthly average of estimated annual costs - will increase the number of parents entering sustainable employment, compared to the current tax credits system.
(c) Disabled Children: To test whether the current 80% subsidy of childcare costs for disabled children, paid up to a higher limit than the current WTC limits, increases the number of parents entering sustainable employment, compared to the current tax credits system; and to test the impact of the offer on parental attitudes towards childcare and the labour market.
(e) Parental Support Offer. To test whether improving advisory support for parents and simplifying access to the current system increases sustainable parental employment and take-up of childcare.
(f) Subsidised Offer: To test how increased supply-side subsidies impact on sustainable employment and the take-up of formal childcare and to test whether conditional funding for LAs has any impact on either LA behaviour or ultimately on outcomes.
[TCCG, response 23 March 2009]
- Children's Centres: Representatives asked HMRC for more information about the role of their staff in Children's Centres. HMRC stated that they envisage that the advice and support will include a range of activities such as:
- Distributing leaflets and posters at the Centre giving basic information on tax credits to customers;
As part as the general advice service, HMRC expect staff to direct people to the normal channel for reporting changes i.e. the Helpline. However, where they are offering one to one support, the aim is that advisers will be able to take changes of circumstances.
The initial remit is for providing tax credit advice only. When HMRC have assessed how the work progresses, consideration will be given to widening out the types of advice we would like to provide. The aim is to be in Children's Centres in England by early 2009. HMRC agreed to update representatives with more information as soon as it was available. Representatives replied to HMRC with follow up questions about the tax credit advice that was going to be given, in particular how it will be recorded and treated for COP 26.
[Victoria Todd, LITRG, response 17 December 2008]
- Childcare by family members: Representatives asked for confirmation regarding childcare by a family member specifically where the family member was a registered childminder and childcare was taking place away from the child’s own home. HMRC confirmed that this would currently be acceptable for the childcare element of WTC.
[Siobhan Harding, Citizens Advice NI, response 20 March 2008]
- Children Act payments: Representatives queried whether payments under Section 17 and 24 Children Act 1989 were income for tax credit purposes. HMRC confirmed that there are no provisions under the tax credit legislation to take these payments into account as the claimant’s income.
[Victoria Todd, LITRG, response 20 December 2007]
- Training allowances: Representatives queried whether a young person who receives a training allowance for the training/education they receive is to be included on a claim for CTC. HMRC confirmed that as long as the young person is undertaking approved training which is not provided by their employer, they can be treated as being a qualifying young person and included on the CTC claim, even if a training allowance is paid to them. The key is the training they are undertaking. See Regulation 5 CTC Regs 2002 and definition of approved training is the same as Reg 1(3) of the Child Benefit (General) Regulations.
[Lucy Cochrane, Citizens Advice NI, response 10 Oct 2007]
- Eligible childcare: From 1 October 2007, childcare provider or childcare clubs that are 'approved' by accredited Over Sevens Quality Assurance (QA) schemes in England, - such as for example, Aiming High; 4Children; Growing in Quality – Children's Links; and Quality for All – Oldham EYDCP - will no longer be treated as 'eligible childcare' for tax credit and employer supported childcare (ESC) purposes. The childcare element and employers childcare vouchers are only payable if the childcare provider or clubs are also registered with Ofsted.
[Victoria Todd, LITRG, response 19 September 2007]
- Childcare vouchers: It has been highlighted to HMRC that the current childcare indicator on the website has a number if flaws which need to be publicised. A list was provided. The lack of adequate information for parents trying to determine whether they should accept childcare vouchers has also been raised.
[John Andrews, LITRG, 17 August 2007]
- Child maintenance bill: Representatives asked at the July TCCG meeting for details regarding the involvement of the TCO in giving income details for child support purposes. HMRC confirmed that they are reviewing the gateways for sharing information with CSA and they will update in due course.
[LITRG, response 16 August 2007]
- Child benefit extension periods: It was confirmed by TCCG that JC+ will take a similar approach to HMRC in order to verify the child benefit extension period – that means they will take the parent’s word for the date of leaving school and then apply the extension period of 20 weeks from the following Monday. This change should be reflected in DWP guidance through the issuing of a bulletin.
[Jane Hayball, LGA, response 8 August 2007]
- Residence Order Allowance: Representatives reported cases of claimants being advised by the helpline that the residence order allowance would count as income. HMRC confirmed that Regulation 19 TC (Definition and Calculation of Income) Regulations 2002 provides for sums to be disregarded. In particular Item 11 in Table 6 of Regulation 19(1) was highlighted.
[Jane Hayball, LGA, response 8 August 2007]
- Adoption orders: A case was reported to HMRC where the helpline advised a claimant that she could not claim CTC until an adoption order was in place. HMRC sent links to the guidance in their manuals stating when a person is to be treated as responsible for a child:
www.hmrc.gov.uk/manuals/tctmanual/TCTM02201.htm and www.hmrc.gov.uk/manuals/tctmanual/TCTM02202.htm
[Jane Hayball, LGA, response 8 August 2007]
