The Inland Revenue says there is 'no evidence whatsoever of an increase in tax credits fraud' - a claim which is baffling many childcare providers, not least because the Inland Revenue is increasingly asking them to check whether parents are sending children to their setting and are therefore entitled to state support.
In some cases providers have found that half of these parents either have never placed children at their setting, or have done so for a few days or weeks and then left, having made a fraudulent claim for the childcare tax credit.
Linda Mills, who runs the Laurels Day Nursery and the Kids Come First out-of-school club in Barnsley, Yorkshire, reckons that fraud and misuse of the tax credit system have threatened the viability of her business in the past year and that it has become easier to cheat since the application process was changed in April 2003.
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