Concerns over tax credit fraud
Scottish nursery owners have warned that changes to the application process brought in when the new Working Tax Credit and Child Tax Credit were introduced in April have left the system wide open to abuse by parents. Leslie Beber, who owns Little Acorns Nursery in Edinburgh, said last week she had experienced 'a major upsurge' in parents ringing her for registration details and reserving places at the nursery, then not taking them up.
Leslie Beber, who owns Little Acorns Nursery in Edinburgh, said last week she had experienced 'a major upsurge' in parents ringing her for registration details and reserving places at the nursery, then not taking them up.
Unlike the old system, nurseries have no way of knowing if parents are claiming the childcare element of the tax credit because the claim form no longer requires the setting to confirm that the child is attending sessions. The onus is now on parents to complete the details on the form, including the name of the approved childcare provider, their registration number and the registering body.
Yvonne McLellan, a director of the Scottish Independent Nurseries Association (SINA), said the Inland Revenue was liaising with it about how best to deal with the problem and that it will contact nurseries to carry out spot checks.
She added that nursery owners gave their registration details and were reserving places 'in good faith' to people who were then potentially able to claim fees without the child starting at the setting. 'It is causing havoc, particularly with smaller nurseries,' she said, adding that it was not unusual for settings to keep places open for up to four months.
Maggie Simpson, national development officer for the Scottish Childminding Association, said while there were cases of parents not turning up for places they had booked with a childminder or leaving at short notice, 'whether it is fraud or not is debatable'. She added, 'What will happen is that childminders will increasingly ask for deposits.'
An Inland Revenue spokeswoman said, 'We take fraud extremely seriously and will not put up with tax credits being defrauded. Childcare tax credits deliver more effective support than ever before to working families and anyone tempted to cheat should think again because we are contacting childcare providers across the UK on a selective basis.
'We will be undertaking a national programme of checks with childcare providers over the coming year. This is fully supported by the National Childminding Association, with whom we have been consulting. These are checks with the providers to confirm the amounts claimed in respect of childcare costs.'
