1Entitlement to receive money towards costs of childcare

(1)This Act contains provision for HMRC to make payments (“top-up payments”) to be used towards the costs of qualifying childcare.

For the meaning of “qualifying childcare”, see section 2.

(2)A person is entitled to receive a top-up payment for an entitlement period in respect of a child if—

(a)the person is an eligible person for the entitlement period (see section 3),

(b)the person has made a valid declaration of eligibility for the entitlement period (see section 4),

(c)the child is a qualifying child (see section 14),

(d)the person holds a childcare account in respect of the child (see section 15), and

(e)a qualifying payment is made into the childcare account during the entitlement period (see section 19).

(3)HMRC must pay the top-up payment into the childcare account.

(4)The amount of the top-up payment is 25% of the amount of the qualifying payment.

(For provision limiting the amount of qualifying payments that may be made into a childcare account in an entitlement period, see section 19(4).)

(5)Regulations may amend subsection (4) so as to substitute a different percentage for the percentage for the time being specified there.

(6)Sections 17 to 25 contain provision about childcare accounts, including restrictions on the kinds of payments that may be made from childcare accounts.

(7)Sections 26 to 29 contain provision about obtaining and sharing information.

(8)Sections 30 to 34 contain special rules about persons who are claiming tax credits or universal credit.

(9)Sections 35 to 55 contain provision about penalties and other enforcement powers, including powers to recover top-up payments in certain circumstances.

(10)Sections 56 to 61 contain provision about reviews and appeals.

(11)Section 62 contains provision enabling HMRC in certain circumstances to compensate persons who have been deprived of the opportunity to receive top-up payments.

(12)Sections 63 and 64 contain provision for the withdrawal of tax exemptions in respect of certain kinds of employer-provided childcare schemes.

2Qualifying childcare

(1)In this Act “childcare” means any form of care or supervised activity for a child that is not provided in the course of the child’s compulsory education.

(2)Childcare that is provided for a person is “qualifying childcare” for the purposes of this Act if—

(a)it is registered or approved childcare, and

(b)the main reason, or one of the main reasons, for incurring the costs of the childcare is—

(i)to enable the person to work, or

(ii)where the person has a partner, to enable both the person and the person’s partner to work.

(3)Regulations may—

(a)make provision about what is, or is not, to be regarded as registered or approved childcare for the purposes of this section;

(b)define what is meant by “work” for the purposes of this section;

(c)specify cases where the condition in subsection (2)(b) is to be treated as met;

(d)specify cases where that condition does not need to be met.

(4)Regulations made under subsection (3)(a) may, in particular, provide that childcare provided outside the United Kingdom is registered or approved childcare if it is provided by a person approved by an organisation that is accredited by a person or body under an enactment.

(5)Subsection (2) is subject to any direction made under section 50 (which enables HMRC in certain circumstances to direct that childcare provided by a person is not qualifying childcare).