The Childcare Payments (Amendment) Regulations 2016

EXPLANATORY NOTE

(This note is not part of the Regulations)

These Regulations amend the Childcare Payments Regulations 2015 (S.I. 2015/522) (“the 2015 Regulations”) which provide for the administration of childcare accounts and top-up payments made under the Childcare Payments Act 2014 (c. 28) (“the Act”) and for other procedural matters in relation to the childcare payments scheme.

Regulation 3 amends the definition of “personal independence payment” (“PIP”) in the 2015 Regulations by adding a definition for Northern Ireland following the introduction of PIP’s from 20 June 2016 in Northern Ireland.

Regulation 4 amends regulation 6 of the 2015 Regulations which provides for specifying the time for making a declaration of eligibility and when it will be determined as valid by HMRC. The amendment requires persons who are self-employed, and are making a declaration of eligibility to provide a Unique Taxpayer Reference (UTR) or to confirm they are yet to receive such a reference. The UTR is a reference number provided by HMRC to taxpayers when they register for self-assessment.

Regulation 5 amends regulation 7 of the 2015 Regulations which provides for late declarations of eligibility and its consequences. The amendment disallows pro-rating of qualifying payments into childcare accounts in cases of late declaration, except where parents or their partners have received Universal Credit (“UC”) or Tax Credit (“TC”) at any time during the entitlement period. This also applies to a resident of another EEA state working in the UK, and either they or their partner receives a credit equivalent to UC or TC.

Regulation 6 amends regulation 11 of the 2015 Regulations which provides for the form and procedure for opening a childcare account. These amendments are consequential to amendments made to regulation 6 of the 2015 regulations.

Regulation 7 amends regulation 17 of the 2015 Regulations which prescribes the circumstances where a compensatory payment under section 62 of the Act may be made. This amendment provides an additional circumstance where such a payment can be made. It will compensate parents who are unable to receive top-up payments due to not being able to open a childcare account for a continuous period of 14 days because of a serious technical failure affecting HMRC or the account provider.

Regulation 8 amends regulation 18 of the 2015 Regulations. The amendment extends the circumstances in which an account restriction order can be made to cases where a parent or partner has applied for UC or TC and also cases where an account holder agrees to an account restriction order being made.

Regulation 9 amends regulation 22 of the 2015 Regulations which provides that applications to open an account and declarations of eligibility must in most circumstances be sent to HMRC electronically and that an account provider must make payments in respect of qualifying childcare electronically. There are certain exceptions to this. The amendment adds a further exception where the use of non-electronic routes to either make a declaration of eligibility or an application for childcare payments is permitted. These non-electronic routes will be permitted if there is a technical failure affecting HMRC for a continuous period of at least 7 days.

A full Impact Assessment of the effect that the childcare payments scheme will have on the costs of business and the voluntary sector was published on 18th November 2014 alongside The Childcare Payments Act 2014 and is available from the gov.uk website at https://www.gov.uk/government/publications/tax-free-childcare-impact-assessment. It remains an accurate summary of the impacts that apply to this instrument.