The information comes from a response to a parliamentary question from Tulip Siddiq MP.
- Call for high earners to be 'stripped' of the 30 hours and Tax-Free Childcare
- £600m underspend as parents shun Tax-Free Childcare
The Labour MP for Hampstead and Kilburn, who is chair of the All-Party Parliamentary Group for Childcare and Early Education, asked the Chancellor of the Exchequer how many people had reported technical issues with Tax-Free Childcare payments to the Treasury as of October 2018, and how people affected would be compensated.
In response, chief secretary to the Treasury Liz Truss said, ‘The vast majority of parents apply for and use their childcare accounts without problems. Where parents have experienced technical issues that impact them financially, HMRC has arrangements in place to ensure that they do not miss out as a result. Where parents report technical issues with their Tax-Free Childcare payments, HMRC pay compensation to reimburse them for any missed government top-up.
‘To 31 October 2018, HMRC has received 4,560 complaints from parents who have experienced technical issues with the childcare service. HMRC does not hold information on the breakdown of the complaints in relation to Tax-Free Childcare payments specifically.’
In February the Government confirmed it had received 3,496 complaints as of 22 December 2017, but claimed it had made ‘significant improvements’ to the service.
This means that 1,064 formal complaints were made between 22 December 2017 and 31 October 2018.
IT problems
Tax-Free Childcare was launched in April 2017 but has suffered a number of IT glitches, which led to delays in the full roll-out of the scheme.
The latest incident last month led to delays of up to a week in 22,000 payments made to childcare providers.
HMRC said that the payments affected were standing orders made on 30, 31 October and 1 November.
Last month Nursery World revealed that just 7 per cent of families eligible for Tax-Free Childcare were using the scheme.
In contrast there was a surge of applications for childcare vouchers in the run-up to their closure in October.
Meanwhile Labour analysis of budget documents found that projected Government spending on TFC will be £600 million lower than expected in the next four years, due to low take-up of the scheme.
Commenting on the latest figures, Neil Leitch, chief executive of the Pre-school Learning Alliance, said, ‘Every time concerns about the tax-free childcare system are raised, we're told that while there may have been problems in the past, all has since been rectified.
‘Why is it then that more than 18 months after the launch of the scheme, the number of formal parental complaints - which in itself is likely to only represent a small proportion of the total number of parents actually experiencing issues - is continuing to increase at such a rate?
‘With childcare vouchers now closed to new applicants, it's more important than ever that the tax-free childcare system functions properly - and yet, it's clear that the technical issues facing the website are yet to be properly addressed.
‘What’s more, while the Government has focused on ensuring that parents experiencing difficulties are compensated, very little has been said about the impact on childcare providers, many of whom have experienced significant payment delays and spent disproportionate amounts of time trying to help parents navigate a fundamentally flawed system.
‘Enough is enough: HMRC needs to get a grip on this problem and ensure that the system underpinning one of its flagship policies actually works as it's supposed to.’
Ms Siddiq said, ‘The Government’s cavalier management of Tax-Free Childcare is deeply irresponsible. Parents are struggling to afford childcare, and settings are struggling to afford their monthly bills, which means that all complaints must be acted upon decisively and ministers must make sure the system is fit for purpose. For as long as the Government pleads ignorance to the problems with tax-free childcare, parents and providers alike will face a real struggle to benefit from what is supposed to be a flagship policy.’