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HMRC internal manual

Tax Credits Manual

From
HM Revenue & Customs
Updated
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Changes: children (A-E): childcare changes

Checklist

Before you follow this guidance, make sure

  • you follow the guidance in TCM0138020 
  • check the ‘Unprocessed Change of Circs’ work list for any outstanding entries and make a note of any information you require to clear the work item. Follow the guidance in TCM0054060 
  • you have the correct user roles to follow this guidance. Use the B&C Roles and Access Catalogue. You can find this by going to the Benefits & Credits homepage, selecting ‘R’ on the B&C A-Z index, selecting ‘Roles and Access Process’, selecting ‘Roles & Access Catalogue’ from the Related links menu
  • the customer is entitled to the childcare element. For how to do this, use TCM1000379 
  • you are in the correct MU. Use TCM0322460.

Required information

Ensure you have confirmed all the following information with the customer as well as any information you need to clear the work item from the Unprocessed Change of Circs work list. Follow the guidance in TCM0094080.

Note: If the customer does not respond to your enquiries about childcare charges within the required 30-day timescale, you can contact the childcare provider in writing for the details you need and allow 30 days for a response. You must not contact the childcare provider where you have not yet tried to contact the customer.

Note: If the only information you need is the date the change occurred and you have completed the full reminder cycle, as well as trying to contact the childcare provider for this information, you must use the date the customer informed HMRC of the change as the date the change occurred.

Note: If you are writing to a childcare provider, you must not disclose any information about the customer’s claim or any amounts they’ve reported on their claim.

Note: The customer can not claim help for costs paid by childcare vouchers given to them by their employer for less pay (This is known as ‘salary sacrifice’), or costs met by the local authority. If this is the case their income may be affected and you may need to change this or any costs paid by an educational grant.

Note: In all cases where childcare costs have reduced by £10 a week or more, and this change will last for four consecutive weeks or more, the four week run on must be calculated and applied.

If the customer is not currently claiming childcare costs, you’ll need

  • the date the childcare costs started

Note: On 28 April 2008, the Department for Work and Pensions (DWP) started a two-year pilot that allows payment of up front costs for lone parents in the London area. All payments made from the Up-Front Childcare Fund (UFCF) are made directly to the registered or approved childcare provider by DWP and should not be included for tax credits purposes.

  • the end date of any childcare costs paid by DWP, if applicable

Note: Any childcare costs paid by a third party - for example, a grandparent or ex-partner - and which are reimbursed by the customer are treated as being paid and may be claimed.

  • the weekly childcare costs. Confirm with the customer that the costs do not include any vouchers or educational grant. For how to do this, use TCM1000139 

Note: Where the costs are being paid wholly by voucher or grant you can not include these costs.

  • the name of the child the childcare costs relate to
  • the childcare provider’s name, full address and post code
  • whether the childcare provider is registered or approved

Note: It is the customer’s responsibility to ensure that the childcare provider is registered or approved.

  • the name of the authority or other body the childcare provider is registered or approved with
  • (if the customer lives in England) the registration or approval number.

If only the childcare costs have changed, you’ll need

  • the date the childcare costs changed

Note: Check with the customer that they have not already included this change, in order to work out a weekly average over the period of their claim. For example, if the customer knew they would pay different costs during term time from when they do in the holidays.

  • the new weekly childcare costs. Confirm with the customer that the costs do not include any vouchers or educational grant. For how to do this, use TCM1000139 

Note: Any childcare costs paid by a third party - for example, a grandparent or ex-partner - and which are reimbursed by the customer are treated as being paid and may be claimed.

  • where the customer pays fixed weekly costs, ask the customer if the new costs will last for four weeks or more
  • the name of the child the change relates to
  • the childcare provider’s name
  • whether the childcare provider is still registered or approved.

Note: It is the customer’s responsibility to ensure that the childcare provider is registered or approved.

If the childcare provider and costs have changed or there is an additional childcare provider and/or child, you’ll need

  • the date the childcare costs changed
  • the new weekly childcare costs. Confirm with the customer that the costs do not include any vouchers or educational grant. For how to do this, use TCM1000139 

Note: Any childcare costs paid by a third party - for example, a grandparent or ex-partner - and which are reimbursed by the customer are treated as being paid and may be claimed.

  • where the customer pays fixed weekly costs, ask the customer if the new costs will last for four weeks or more
  • the name of the child the change relates to
  • the old childcare provider’s name, if applicable
  • the new childcare provider’s name, address and post code

Note: It is the customer’s responsibility to ensure that the childcare provider is registered or approved.

  • the name of the authority or other body the childcare provider is registered or approved with
  • (if the customer lives in England), the registration or approval number.

If the customer is reporting a short-term period of childcare, you’ll need

Note: Short-term childcare is for customers who only pay costs for short periods of the year, for example, school holidays. If a customer pays childcare throughout the year but incurs additional costs for short periods, these must be added to their normal costs and averaged over the year.

Note: From April 2010, the tax credits computer has been updated to allow the end date of a fixed period of childcare to be future posted ten weeks in advance of today’s date for short-term childcare only. This will capture most of the short-term childcare claims as the majority are likely to arise from school holidays. If the fixed period end date is longer than ten weeks from today’s date, you’ll need to manually end the childcare costs when they cease.

  • the date the childcare costs started
  • the date the childcare costs ended
  • the total childcare costs for the whole of the short term period. Confirm with the customer that the costs do not include any costs covered by vouchers or educational grants

Note: Any childcare costs paid by a third party - for example, a grandparent or ex-partner - and which are reimbursed by the customer are treated as being paid and may be claimed.

  • the name of the child the change relates to
  • the new childcare provider’s name, address and post code
  • whether the childcare provider is registered or approved

Note: It is the customer’s responsibility to ensure that the childcare provider is registered or approved.

  • the name of the authority or other body the childcare provider is registered or approved with
  • (if the customer lives in England) the registration or approval number.

If the child is no longer in childcare, you’ll need

  • the name of the child the change relates to
  • the date the childcare costs stopped.

If the customer is paying the whole or part of the childcare costs by voucher or educational grant, you’ll need

  • the name of the child the change relates to
  • the date the customer started paying the whole of the childcare costs by voucher or educational grant
  • the amount covered by the voucher or educational grant and the amount they actually pay.

If the childcare provider is no longer registered or approved, you’ll need

  • the name of the child the change relates to
  • the date the childcare provider stopped being registered or approved.

If the existing childcare provider’s personal information has changed, you’ll need

  • details of what’s changed - for example, the childcare provider’s name, address, registration or approval number
  • whether the childcare provider still registered or approved

Note: If the childcare provider is no longer registered or approved, you’ll need to end the costs for that provider.

  • the date the change happened.

If the customer is claiming childcare costs from the Department for Children, Schools and Families (DCSF)

Note: People returning to education can claim childcare costs from DCSF. This is paid at a higher rate than that paid by the tax credits childcare element. If a customer is only in receipt of WTC because of the childcare costs they pay, WTC will stop and they may lose any passported benefits that tax credits entitles them to.

  • where the childcare element is in payment, obtain the date the customer started to receive payment from DCSF.

Guidance

Note: When sending customer, staff or process data to another individual or team, make sure you follow the latest data security guidelines or contact the Data Guardian / Data Security Team for advice.

Step 1

Note: To get help with childcare costs, the customer must qualify for the childcare element of WTC. Before you update any childcare costs, you must update the computer with any new child details or any changes to work details. You must work the earliest change first.

Check for any items on the Unprocessed Change of Circs work list. For how to do this, use TCM1000142 

If there are any outstanding items on the Unprocessed Change of Circs work list

  • action the work items first. Follow the guidance in TCM0054060 

Note: Do not complete the Amend Finish screen until you have applied all the appropriate changes.

  • go to .

If there are no outstanding items on the Unprocessed Change of Circs work list, go to .

Step 2

Check if the childcare change has been reported too far in the future. For how to do this, use TCM1000141.

If the childcare change has been reported too far in the future

  • set an action date or clerical BF date as appropriate, to within seven days of the change happening. For how to do this, use TCM1000008 

then, when the action date or BF date has expired

  • contact the customer to confirm that the change is still going to happen and confirm the details of the change. Follow the guidance in TCM0094080 
  • once you have the required information, go back to and apply the change.

If the childcare change has not been reported too far in the future

  • ensure you can make the change. Follow the guidance in TCM0042260 

then, if you can make the change

  • go to .

Step 3

If only the existing childcare provider’s personal information has changed, go to .

If the above does not apply and the claim is pre-award

  • enter all the required information on the ‘Free Format’ screen. For how to do this, use TCM1000036 
  • go to .

If the above does not apply and the claim is post award, go to .

Step 4

Check the information you obtained from the customer.

If the customer is claiming childcare costs for the first time and the provider is registered or approved, go to .

If the customer is claiming childcare costs for the first time and the provider is not registered or approved

  • contact the customer and tell them that to get help with childcare costs they must use a registered or approved provider. Follow the guidance in TCM0094080 
  • update Household Notes with the message NC60 from TCM0164020. For how to do this, use TCM1000001 
  • go to .

If the customer is reporting a new period of short-term childcare and the provider is not registered or approved

  • contact the customer and tell them that to get help with childcare costs they must use a registered or approved provider. Follow the guidance in TCM0094080 
  • update Household Notes with the message NC60 from TCM0164020. For how to do this, use TCM1000001 
  • go to .

If the customer is reporting a period of short-term childcare and the provider is registered or approved, go to .

If you are dealing with a short-term childcare referral, go to .

If you are dealing with an expired BF date for a short term childcare case and now need to enter the end date, go to .

If the child is no longer in childcare, go to .

If the customer is paying the whole of the childcare costs by voucher or educational grant, go to .

If the customer is reporting that some of their childcare costs are now being paid by voucher or educational grant, go to .

If the childcare provider is no longer registered or approved, go to .

If the customer is claiming childcare costs from the DCSF, go to .

If this is a change to an existing childcare provider and/or costs and they do not pay the same amount each week, go to .

If this is a change to an existing childcare provider and/or costs and they do pay the same amount each week, go to .

If the customer is claiming costs for an additional childcare provider and they do not pay the same amount each week, go to .

If the customer is claiming costs for an additional childcare provider and they do pay the same amount each week, go to .

Step 5

Check the information you obtained from the customer to determine if the change will last four weeks or more.

If the change will not last for four weeks or more, go to .

If the change will last for four weeks or more, go to .

Step 6

Contact the customer and tell them that we only update childcare costs if the change will last four weeks or more. Follow the guidance in TCM0094080 

  • update Household Notes with the message NC60 from TCM0164020. For how to do this, use TCM1000001 
  • go to .

Step 7

Check the information you obtained from the customer to determine if the total average weekly childcare costs have changed by £10.00 or more weekly.

If the childcare costs have changed by £10.00 or more weekly, go to .

If the childcare costs have not changed by £10.00 or more weekly, go to .

Step 8

If the customer is reporting that only the childcare costs have changed or that they have an additional childcare provider, go to.

If the customer is reporting that the childcare provider and the childcare costs have changed

  • make a note that you must amend the childcare provider details only and keep the childcare costs the same
  • go to .

Step 9

  • contact the customer and tell them that we only update childcare costs if the average weekly costs have changed by £10.00 or more weekly. Follow the guidance in TCM0094080 
  • update Household Notes with the message NC59 from TCM0164020. For how to do this, use TCM1000001 
  • go to .

Step 10

Calculate the effective date for the childcare change and make a note of it. For how to do this, use TCM1000140 

then

  • from the information you obtained from the customer.

If the child is no longer in childcare and this is the customer’s only child with this childcare provider

  • end the childcare costs. For how to do this, use TCM1000163 

Note: Do not complete the ‘Amend Finish’ screen at this point.

  • go to .

If the child is no longer in the childcare and this is not the customer’s only child with this childcare provider

  • enter the cost that is in payment for the remaining child or children in child care

Note: Do not complete the ‘Amend Finish’ screen at this point.

  • go to .

If the customer is paying the whole of the childcare costs by voucher or educational grant

  • end the childcare costs. For how to do this, use TCM1000163

Note: You must calculate and apply a four week run on.

Note: Do not complete the ‘Amend Finish’ screen at this point.

  • go to .

If the customer is paying some of the childcare costs by voucher or educational grant

  • recalculate the childcare costs, firstly deducting the amount paid by voucher or educational grant. For example if the childcare costs are £200 but £50 is paid by voucher, use £150 as the new childcare costs.

Note: If the customer’s childcare costs have reduced because some of the costs are now paid by voucher or educational grant, you must calculate and apply a four-week run-on.

Note: Do not complete the ‘Amend Finish’ screen at this point.

  • go to .

If the childcare provider is no longer registered or approved

  • end the childcare costs. For how to do this, use TCM1000163 

Note: Do not complete the ‘Amend Finish’ screen at this point.

  • go to .

If the customer is claiming childcare costs from the DCSF

  • end the childcare costs. For how to do this, use TCM1000163 

Note: Do not complete the ‘Amend Finish’ screen at this point.

  • go to .

If none of the above apply, go to .

Step 11

If the calculated start date of the new childcare costs is more than seven days from today’s date 

  • update Household Notes with the message NC57 from TCM0164020. For how to do this, use TCM1000001 
  • set an action date or clerical BF date, as appropriate to a date seven days before the calculated start date. For how to do this, use TCM1000008 

then, when the action date or BF date has expired

  • go back to and apply the change.

If the calculated start date of the new childcare costs is not more than seven days from today’s date and the customer is claiming childcare costs for the first time, go to .

If the calculated start date of the new childcare costs is not more than seven days from today’s date and the customer has restarted childcare after a break, go to .

If the calculated start date of the new childcare costs is not more than seven days from today’s date and the costs have increased, go to .

If the calculated start date of the new childcare costs is not more than seven days from today’s date and the costs have decreased, go to .

Step 12

Note: If the customer reports a change in childcare costs and then reports a further childcare costs change within four weeks of the first change happening, you must ensure there is no overlap or gap in childcare entitlement.

Check Household Notes to determine if a previous change in childcare costs has been reported in the last four weeks. For how to do this, use TCM1000067.

If no previous change in childcare costs has been reported in the last four weeks, go to .

If a previous change in childcare costs has been reported in the last four weeks

  • amend the previous childcare costs end date to prevent an overlap of childcare costs. For how to do this, use TCM1000143 
  • go to .

Step 13

From the information you obtained from the customer.

If the customer is claiming childcare costs for the first time

  • enter the details of the childcare provider and costs. For how to do this, use TCM1000166 

Note: Do not complete the ‘Amend Finish’ screen at this point.

  • go to .

If childcare is now being paid for an additional child, go to .

If neither of the above apply, go to .

Step 14

If this is a change to the childcare costs only

  • enter the details of the new childcare costs. For how to do this, use TCM1000167 

Note: Do not complete the ‘Amend Finish’ screen at this point.

  • go to .

If this is a change to the childcare provider and costs

  • enter the details of the new childcare provider and costs. For how to do this, use TCM1000167 

Note: Do not complete the ‘Amend Finish’ screen at this point.

  • go to .

If there is an additional childcare provider to be added

  • enter the details of the additional childcare provider. For how to do this, use TCM1000164 

Note: Do not complete the ‘Amend Finish’ screen at this point.

  • go to .

Step 15

If this is a change to the existing childcare provider’s name, approving body or registration number (but not their address)

  • amend the existing childcare provider’s name, approving body or registration number, as appropriate. For how to do this, use TCM1000162 

Note: Do not complete the ‘Amend Finish’ screen at this point.

  • go to .

If this is a change to the existing childcare provider’s address, go to .

If this is a change to the existing childcare provider’s name, approving body or registration number and their address

  • amend the existing childcare provider’s name, approving body or registration number, as appropriate. For how to do this, use TCM1000162 

Note: Do not complete the ‘Amend Finish’ screen at this point.

  • go to to amend the existing childcare provider’s address.

Step 16

Use the tax credits computer to trace the childcare provider’s correct address. For how to do this, use TCM1000145 

Note: If you have been unable to trace the address, you will need to correct or change the current details with the new ones provided by the customer.

then

If the claim is pre-award, go to .

If the claim is post award, go to .

Step 17

Amend the childcare provider’s address. For how to do this, use TCM1000165 

Note: Do not complete the ‘Amend Finish’ screen at this point.

  • go to .

Step 18

Amend the childcare provider’s address. For how to do this, use TCM1000165 

Note: Do not complete the ‘Amend Finish’ screen at this point.

  • update Household Notes with the message NC55 from TCM0164020. For how to do this, use TCM1000028 
  • go to .

Step 19

If all the changes have been applied and the claim is post award, go to .

If other changes are required 

  • apply the other changes. Follow the appropriate Changes guidance
  • go to .

If all the changes have been applied and the claim is pre-award

  • update Household Notes with the message NC55 from TCM0164020. For how to do this, use TCM1000028 
  • go to .

Step 20

Ask the customer how they want their childcare costs, if they qualify paid to them. They can choose to have the money paid to cover the short term costs only or averaged over the year. Follow the guidance in TCM1000139.

Note: If the customer chooses to have the costs averaged over the year, they will not be able to claim for short-term childcare in the future. Any additional costs incurred will have to be added to their annual costs and averaged over the year.

If the customer wants the childcare costs averaged over the year

  • treat the costs as normal childcare costs
  • go back to .

If the customer wants the childcare costs to cover the short-term period of childcare only, go to .

Step 21

Check that the end date of the short-term childcare is within 70 days of today’s date.

Note: The tax credits computer will allow you to enter an end date for short-term childcare up to a maximum of 70 days from today’s date.

If the end date of the short-term childcare is more than 70 days from today’s date

  • the tax credits computer can not future post the end date of the childcare costs
  • make a note of the end date
  • go to .

If the end date of the short term childcare is not more than 70 days from today’s date, go to .

Step 22

Enter the short-term childcare provider details, costs, start and end dates. For how to do this, use TCM1000370 

Note: Do not complete the ‘Amend Finish’ screen at this point.

  • go to .

Step 23

Enter the childcare provider details, costs and start date. For how to do this, use TCM1000370 

Note: Do not complete the ‘Amend Finish’ screen at this point.

  • go to .

Step 24

Note: As the end date of the reported childcare is more than 70 days from today’s date manual intervention is needed to end the childcare.

Set a BF date on the case until within 70 days of the end date

  • go to .

Step 25

Complete the ‘Amend Finish’ screen. For how to do this, use TCM1000032 

Note: If the childcare change applies to more than one tax year you must complete your action for each affected year, once you have followed the guidance in TCM0042260.

Note: The changes you have made will not be applied until you complete the ‘Amend Finish’ screen and select ‘OK’.

then

If a warning message displayed and you had to pass the case to a Level 2 User or your manager, take no further action.

If a warning message displayed and you were able to make the change

  • update Household Notes with the appropriate message - NC51, NC52, NC53, NC54, NC55 - from TCM0164020. For how to do this, use TCM1000001 
  • go to .

If no warning message displayed

  • update Household Notes with the appropriate message - NC51, NC52, NC53, NC54, NC55 - from TCM0164020. For how to do this, use TCM1000001 
  • go to .

Step 26

If you have been working a work list item 

  • delete the work list item. For how to do this, use TCM1000160 
  • take no further action.

If you have been working a WAM referral

  • put the referral in confidential waste
  • take no further action.

If you have been working a piece of correspondence 

  • send it to storage. Follow the guidance in TCM0074060 
  • take no further action.

Step 27

Enter an end date for the short-term childcare. For how to do this, use TCM1000370 

  • go back to .