Tax credits paid straight to providers

**Becc** · 09-03-2012, 11:34 AM

Hi

Childminders around me have had terrible problems getting paid, which is made more difficult because the parents involved get their childcare costs contributed towards via tax credits. So far, these tax credits have paid for everything except childcare! (think nights out, christmas presents, wallpaper) I think the system needs an overhaul, and we should be paid directly from hmrc instead. I've started an online petition on ipetitions.com/pay-childcare-element-of-tax-credits-straight-to-childcare-providers. Please, if you feel the same, sign it! If we can kick up enough fuss, maybe someone will listen......let as many people as possible know! thank you xxx

**miffy** · 09-03-2012, 11:42 AM

I see where you're coming from but I'm not sure all childminders would want to be paid direct - what would happen if there was an overpayment? I'm not sure I'd want HMRC coming after me for the money.

Miffy xx

**Mouse** · 09-03-2012, 11:50 AM

Personally I wouldn't want direct payment and could see it leading to all sorts of problems.

**christine e** · 09-03-2012, 12:12 PM

Me neither, like Miffy I see big problems when overpayments occur - what happens if a parent makes a false claim re income, tax credits later find out and money is owed - if we had it paid to us direct then we would likely have to cough up!

Cx

**Mouse** · 09-03-2012, 12:18 PM

I would prefer to see a reliable way that we could report parents who didn't pay us despite claiming tax credits.

**Kiddleywinks** · 09-03-2012, 12:31 PM

I agree that childcare providers should be paid direct somehow, and I've seen a post elsewhere (can't remember where though lol) where this was being discussed, and someone suggested a voucher scheme whereby instead of cash, a parent were sent vouchers and used these to pay childcare providers.

It's a hard one as there will always be ways of 'screwing the system' but I do think there has to be a better way than the current one

**christine e** · 09-03-2012, 12:38 PM

Originally Posted by Chrissie H

I agree that childcare providers should be paid direct somehow, and I've seen a post elsewhere (can't remember where though lol) where this was being discussed, and someone suggested a voucher scheme whereby instead of cash, a parent were sent vouchers and used these to pay childcare providers.

It's a hard one as there will always be ways of 'screwing the system' but I do think there has to be a better way than the current one

Sounds like a good idea to me - this way the parent would be handing over the voucher so that would protect the childcare provider

onceinabluemoon · 09-03-2012, 12:42 PM

I wouldn't want to be paid direct, when a parent has committed fraud and has to pay back thousands it would be us they came after, we'd have to pay them back and then chase parents for money which of course we'd never get. So no thanks from me.

BUt I would like to see a way in which it was checked regularly. even if it meant filling in an online form every month/3 months with a parents childcare fees on it. Thats about the only way they would stop them claiming for childcare they're not paying for. Then if parents don't pay us Childcare element is stopped immediately. Betcha we'd get paid then!

(to be perfectly fair all my parents pay me on time whether they are in receipt of benefits or not, its the few giving the majority a bad name)

**Liverbird** · 09-03-2012, 12:56 PM

The system definitely needs an overhaul. I currently have a parent that has been claiming tax credits and currently owes me nearly 2 months money. I have now said that I cannot have her children until she clears her debt but she says she can't afford it. I'm worried that she's going to continue claiming and then HMRC will come after me as I've heard they can do random spot checks. Is there any way I can let them know that she hasn't paid and that I'm not caring for the kids anymore?

**Mollymop** · 09-03-2012, 12:57 PM

I prefer parents to continue to be paid tax credits rather than direct to us,as it is the parents responsibility. It is also their responsibility to make sure they pay us accordingly, what they do with their t/c is their business as long as I get paid on time!

**kindredspirits** · 09-03-2012, 01:24 PM

totally agree tax credits office are a nightmare - they chased us for an overpayment we were never even paid and it took years to sort out so there is no way i'd accept payment from them.

**Becc** · 09-03-2012, 01:37 PM

If it were to change, it could maybe work in a similar way to housing benefit whereby any overpayment isn't claimed from the landlord but claimed back from the claimant (I.e. the parents for us). That way we are protected and not chased for overpayment. In housing benefit, the claimant is the tenant although it's paid to the landlord so for us the claimants would be the parents.

**catminder** · 09-03-2012, 01:55 PM

Originally Posted by Mouse

I would prefer to see a reliable way that we could report parents who didn't pay us despite claiming tax credits.

I would too

**TinyTinker** · 09-03-2012, 04:24 PM

I would like to see a form or a phone call from tax credits come to us everytime someone applies for childcare helpf from them to verify that we are indeed providing the care and how many hours for

Pipsqueak · 09-03-2012, 05:02 PM

Originally Posted by Liverbird

The system definitely needs an overhaul. I currently have a parent that has been claiming tax credits and currently owes me nearly 2 months money. I have now said that I cannot have her children until she clears her debt but she says she can't afford it. I'm worried that she's going to continue claiming and then HMRC will come after me as I've heard they can do random spot checks. Is there any way I can let them know that she hasn't paid and that I'm not caring for the kids anymore?

Currently HMRC won't 'spot check' YOU - they may ring you or contact you to ask the details such as child(ren) attending what hours and the payment due to you. However, if the parent is fraudulently claiming then HMRC will not come after you so nothing to worry about on that score.

As to your non-paying client I would be writing them a stern letter demanding that the account be bought up to date - get it ALL in writing, whether that is pursing the account or finishing the contract.

And yes, you can contact HMRC to let them know that she hasn't paid you and that you are no longer her provider. They may not take any notice but at least you have covered your bases.

**Chimps Childminding** · 09-03-2012, 05:18 PM

I agree that there need to be more checks done or we need to be able to submit a form regularly saying who uses our services and what they pay!

If we were to be paid directly by the Tax Credits then the only way I could see it working was if we were paid in arrears and submitted an invoice at the end of each week/month showing what the parents used

TBH I don't have a problem with that, I get paid in arrears anyway and the parents that pay by vouchers get a bill the last friday in the month and the money usually gets paid into my account a couple of days into the next month!

Something needs to be done, just not sure what

**Bluebell** · 11-03-2012, 02:48 PM

I have to say I would love to be paid direct for the reliability and also I don;t charge for holidays or training days so I think if I was paid direct by the government I would charge for these days and then it would be a flat rate I would receive. (I pay my taxes from all the years I have worked - sometimes 3 jobs at a time and never really seen any benefits come back to me!)

However, I think it would get very confusing - especially as the way I understand it no one gets paid 100% of their childcare - it is up to 80%. This would mean the parents would be liable for the rest and it would get confusing. Also so many people don't have the childcare element of the tax credit. When I was working I claimed how much I paid per week for childcare but it was deducted because of earnings - and believe me I was not on that much! However I still needed to tell them how much I paid as it affected the amount of tax credits I received but was not broken down so I never knew how much I was actually receiving for that part!

As for fraud - if you are getting paid for something the parent has claimed fraudulently - ie you are not working those hours then surely you would notify the government to stop the payments? Or do you mean if the parent has claimed low income incorrectly and actually they are liable for the payments? If that is the case surely the government should install a system to recoup the costs from the fraudulent parent not the innocent childminder!? (NOT that I would have faith in that scenario!!)

**singingcactus** · 11-03-2012, 05:02 PM

I think with so many childminders out there charging for their own holidays, for children's holidays and for many hours each month where they are not working, those childminders would get a very nasty shock when the government will only pay for hours worked and not for the space. And the government will insist on only paying for parents work times, not for extra hours, and they will very likely not allow any kind of top up fee to be charged by the minder (they will simply refuse to pay for a minder who charges a top up fee). Also they will pay a set rate, not whatever fee the minder wants to charge.

I think this will result in many minders incomes being halved. I think if everyone signs this then many childminders out there are going to be very very unhappy with the result....but it would be a lot cheaper for the government in the long run, so the politicians will be happy with it.

**rosebud** · 11-03-2012, 06:56 PM

I wouldn't want to be paid direct either. My contract is with the parents, not with HMRC and how they find the money to pay me is not my problem, I am very clear right from the start that I expect to be paid on time no matter what. It was bad enough when I had a "care to learn" contract, I didn't receive the money on time and in fact didn't receive all the money I was owed as the parent stopped going to college so care to learn refused to pay. If my contract had been with her I would have taken her to small claims court.
I do agree however that HMRC should do more regular checks than the "random" ones they currently do.

**rickysmiths** · 11-03-2012, 08:29 PM

Originally Posted by rosebud

I wouldn't want to be paid direct either. My contract is with the parents, not with HMRC and how they find the money to pay me is not my problem, I am very clear right from the start that I expect to be paid on time no matter what. It was bad enough when I had a "care to learn" contract, I didn't receive the money on time and in fact didn't receive all the money I was owed as the parent stopped going to college so care to learn refused to pay. If my contract had been with her I would have taken her to small claims court.
I do agree however that HMRC should do more regular checks than the "random" ones they currently do.

You don't have a Contract with Care to learn. Your Contract is with the parent who uses Care to learn to pay the fees. If she leaves college and so they won't pay she is liable and indeed if she doesn't pay you can take her to court.

I agree with you and I would not want to be paid Tax Credits direct. I would not take a parent if this happened unless I knew for sure that I would not be chased if they over paid me because the parent provided them with the wrong information.
Apart from an initial problem I must say I have never had a problem with them and they have always paid me on time.