HomeHMRCAnother great system from HMRC? (Childcare)

Another great system from HMRC? (Childcare)

An open letter to parents of three and four year olds from a day nursery in the midlands.

Tomorrow many of us should be rejoicing in delight as we are now apparently receiving 30 hours free care for our 3 and 4 year olds!

The Government will no doubt be praising the new initiative as a huge success for hard working parents and patting themselves on the back for delivering one of their key manifesto pledges.

But many of you will have already discovered that ’30 hours free childcare’ is not all it’s cracked up to be.

We all want to help you save around £5000 a year on your childcare costs, but not at the detriment of our livelihoods and sanity.

For the vast majority of parents, it’s a case of ‘subsidised childcare’ not ‘free childcare’. The scheme has been so chronically underfunded by government that the only way many childcare providers can make it financially viable, is for them to charge for all the extras they offer. It costs us £1.50ph for every hour of ‘free’ childcare we deliver unless we charge for ‘additional services’.

We don’t get paid a fee or slice anything off the funding available to cover the huge administration job we do to claim the funding or you; every single penny is passed on to you.

Neither do we get paid for the hours we spend helping parents navigate the atrocious HMRC computer system that has failed for so many of you. We have parents and carers who are at their wits end trying to get a code before it’s too late.

Childcare providers are also doing a huge communications task (unpaid again) on behalf of the government, signposting parents to get help or apply for compensation when the system has failed them. We are also expected to help parents when HMRC get it wrong, for example it’s left up to us to explain to parents why they’ve been given eligibility codes for children who are not the right age and therefore do not qualify for the funding.

At this nursery, we’ve spent hours and hours trying to set up our Tax Free Childcare Account so parents can pay us via the account and save themselves up to £2000 per year. Six months later we still don’t have an account due to a ‘technical problem’ and we were astounded to hear two days ago that HMRC has no resolution for the problem and can’t tell us when – or even if – we will be able to open an account. We have parents in our nursery who are losing £160 every month. This fiasco continues, but we are powerless to resolve the situation ourselves.

The very scheme that is supposed to give you free childcare could in fact end up giving no childcare, as 38% of us do not believe our business will be sustainable in 12 months’ time (figure from Pre-School Learning Alliance survey).

I think I can speak on behalf of the majority of the childcare sector and say that we are doing at very best to deliver a flawed government initiative that is neither being funded properly nor has the IT infrastructure to deliver it efficiently.

Please support your childcare provider and ignore what the politicians would like you to believe.
There is no such thing as free childcare and there never will be….


As a parent in this situation I can confirm just how bad the whole process is.

When you first try to sign up it asks for your child’s details, DOB, etc. as you would expect. You then have to fill in your own details and eligibility criteria to apply. This is followed by an ‘up to 3 day’ wait to find out if you meet the criteria and have been accepted onto the scheme.

In my case I received a text message saying that I had a message and had to log back into my account to read it.

This is where the fun starts. I couldn’t find anywhere to log back in. So what do you do when you don’t know how to do something… Google!

A quick google search revealed that I wasn’t going mad there actually is nowhere to login!
To get back into your account you have to go through the whole process of filling in your child’s details again. Then you have to find the section with your messages (and it’s not obvious).

When I finally got in and found the message section it said that my request for a childcare code had been rejected. I met all of the eligibility criteria so was slightly confused at this. There was no explanation so back I went to google. I found there were a lot of people having trouble and there seemed to be quite a few bugs in the system.

I decided to resubmit my request to see what would happen. I used the exact same information as my initial application. A few days later I received a message saying that I had been successful and they provided me with my code. I have no idea why the first application was rejected. Had I not been persistent I may have never received my code.

As with all working parents my time is limited and precious and I could do without having to go around the houses just to get a code. In all it took me about a week, 3 visits to the website, and several visits to help forums to finally get my code. I have heard of others who had to wait a lot longer.

I can assure you just a simple google search will show the extent of this problem.

Another great system from HMRC?

  • Michael – ICPA


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