TFC75300 - Compensatory payments: circumstances when HMRC must make compensatory payments
Childcare Payments Regulations 2015, regulation 17
Regulation 17 sets out the circumstances in which HMRC must pay a compensatory payment to a person. The amount of compensatory payment is equal to 20% of the costs incurred on qualifying childcare in respect of the child during the period. The circumstances are any of the following:
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where an appealable decision is varied, cancelled, or quashed (whether wholly or partly) on a review
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where a person has applied to open a childcare account, but HMRC are unable to determine eligibility solely because of a delay in the payment to the person, or to the person’s partner, of carer’s allowance (including the Scottish benefit equivalent) or contributory ESA
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in the case of a disabled child, where a person has applied to open a childcare account but, solely because of a delay in the payment to the child of disability living allowance (disability assistance in Scotland), personal independence payment or armed forces independence payment, HMRC is able to grant the application subject to a relevant maximum less than the relevant maximum which applies in respect of a disabled child
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where a person is unable to open a childcare account, or their account fails to function correctly for 14 days continuously because of a technical failure or design flaw affecting HMRC or the account provider
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a person’s childcare account for a child is subject to an account restriction order in the case where another person wants to make a declaration of eligibility for 30 hours free childcare in respect of that child. The person holding the childcare account for that child does not want to hold that childcare account where it prevents the other person from receiving tax credit in respect of the same child
References to the above allowances include references to allowances and payments made under the law of a prescribed state which are substantially similar in character to those allowances and payments.