Nursery World - Tax credit still tied by red tape

The childcare tax credit element of the working families tax credit is still coming under fire for inflexibility and bureaucracy, a year and a half after it was introduced. Claims for working families tax credit (WFTC) run for a six-month period, and it is only possible to apply for the childcare tax credit (CTC) element at the beginning of a claim. Maggie Simpson, national development officer for the Scottish Childminding Association, described this as one of the 'stupid anomalies' of the system because it does not take account of changes in parents' circumstances.

Claims for working families tax credit (WFTC) run for a six-month period, and it is only possible to apply for the childcare tax credit (CTC) element at the beginning of a claim. Maggie Simpson, national development officer for the Scottish Childminding Association, described this as one of the 'stupid anomalies' of the system because it does not take account of changes in parents' circumstances.

She said the inflexibility of the system sometimes prevented CTC from helping unemployed parents back into work - one of the key aims of the system. For example, she had come across one mother who was unable to pay her childminder because the childminder was going through registration but had not yet completed it, and so was ineligible for childcare tax credit. 'The upshot was that they both gave up work,' Ms Simpson said.

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