Management
Pay the tax credits to us to save money, says nursery owner
A Birmingham nursery owner who has been left £5,000 out of pocket by unpaid fees has posted a suggestion on the Government's spending challenge website that tax credits should be paid direct to providers rather than parents.
Jackie Howes, who runs Little Robins Day Nursery in Hall Green, said the move would save the Government millions of pounds and ensure nursery fees are paid. Ms Howes is currently chasing two parents for payments, which she said was creating unnecessary paperwork.
She said the problem with tax credits was that parents see the money as their own and that it was far too easy to commit tax credit fraud because the HM Revenue and Customs does not run sufficient checks.
Ms Howes said, 'The nursery is in a semi-deprived area and I try to help parents by giving them the option of paying their fees weekly or monthly and don't ask for large deposits. I suppose I'm not tough enough, but I don't think it's fair to remove children from the nursery if parents haven't paid fees.'
Purnima Tanuku, chief executive of the National Day Nurseries Association, said, 'For some years NDNA has been urging the Government to look at how the system can be reformed to support families and reduce fraud. An electronic payment system, which could only be used at registered childcare settings, would help parents to manage their money and prevent any fraudulent use of funds. Nurseries would welcome a more direct system of payments, and there are many ways this could be implemented without compromising parental choice.'
The HMRC said a review by the former Inland Revenue had found that although some customers had made mistakes, very few had done anything that could be regarded as fraudulent.
A spokesperson said, 'The childcare element of tax credits is paid direct to the claimant to give them the flexibility to choose their childcare provider and to change it without any delay. There is no evidence to suggest that fraud is extensive.'
