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HMRC internal manual

Claimant Compliance Manual

Particular aspects: child care - child care provider does not confirm customer's details

If there is a discrepancy in the amount of child care charges, this might be because of a misunderstanding in how they are calculated. In these cases you should contact the customer to ask them to explain their calculation and if necessary check the details with the childcare provider.

If the child care provider does not confirm the customer’s details or you cannot reconcile a calculation discrepancy, you should write to the customer to tell them you have been unable to confirm their entitlement to the child care element. You should include in your letter a request for any relevant information. For example, if you believe the child care provider may have changed, you should invite the customer(s) to provide the new details.

If the customer(s) responds stating that there has been a change of child care provider, you should contact the new provider for confirmation of the customer’s details. Tell the customer you will be doing this. See CCM5500 for more information about contacting third parties for information.

If the customer does not respond, or if you are not satisfied with any explanation they provide, you should write to inform them that you have concluded they are not entitled to the child care element, and you will shortly be amending / terminating their award. As soon as possible after writing to the customer(s) you should terminate / amend the award on NTC see Compliance cases menu in the Tax Credit Manual, you should also follow the guidance at CCM6440.

In many cases there will still be some entitlement to tax credits even if the child care element is removed (as there must be entitlement to WTC in order to get the child care element). In these cases amendment will be appropriate. In other cases entitlement will be created by the child care element (because the reported income is too high for the customer(s) to be entitled without it). In these cases termination will be appropriate.

Note that you must only take the child care element into account in arriving at your conclusions. If you are continuing to examine other aspects of the claim, you must not amend / terminate the award on account of them unless your examination of these aspects has already reached the stage where you are able to do so.

If you still need to obtain information from the customer(s) to check other aspects of the claim, you should use the option contained within TC634, which tells them that you will be continuing your examination into these aspects. If the claim was made by a couple, you should send a copy of your letter to each member.