Tax-Free Childcare full roll-out delayed

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Full roll-out of the Government’s Tax-Free Childcare scheme has been delayed until next year.

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Parents with older children will have to wait until next year to benefit from Tax-Free Childcare

The full roll-out of the scheme to working parents of children under the age of 12, or under 17 for disabled children, was expected by the end of the year, but it has now been pushed back to March 2018.

The move to delay the full roll-out of the scheme appears planned to enable further improvements to be made to the Childcare Service, which has suffered from numerous technical glitches.

The news came as the Treasury announced that Tax-Free Childcare (TFC) will open to parents whose youngest child is under six or turns six on 24 November.

Currently only working parents of children under the age of four (on 31 August 2017) can benefit from the scheme, which went live in April and is accessed via HMRC’s Childcare Service.

The Treasury said, ‘More than 275,000 parents have an open childcare (Childcare Service) account. Of these, more than 216,000 received an eligibility code for the 30 hours of funded childcare for this term.

‘However, while the majority of parents used the Childcare Service without significant problems, we recognise that over the summer some parents didn’t receive the intended level of service when using the website. We have now made significant improvements.

‘Over the coming months, we will gradually open the Childcare Service to parents of older children, while continuing to make further improvements to the system. This means we can manage the volume of applications going through the service, so parents continue to receive a better experience and prompt eligibility responses when they apply – almost all parents receive a response within five working days, and most get their decision instantly. All eligible parents will be able to apply by the end of March 2018.

Responding to the news that TFC has been delayed for parents of older children, Neil Leitch, chief executive of the Pre-school Learning Alliance, said, ‘Given the concerns over the performance of the Childcare Service website over recent months, it’s no surprise that the Government has decided to delay the full rollout of tax-free childcare to ensure the system can cope with an increased volume of applications. That said, with many families still struggling with the cost of childcare, parents who had hoped to benefit from the scheme by the end of the year will be understandably disappointed by this delay. 

‘With the Childcare Service system now set to service a significantly higher number of parents, it is vital that the Government invests what’s needed to deliver and maintain an IT system that both parents and childcare providers are able to use and rely on.

‘And of course, if the Government really wants to address the rising cost of childcare for younger children, the most effective action it could take is to fund the early years sector adequately. Evidence has shown that supply-side funding is key to lowering childcare costs for parents, and it is this that the Government needs to focus on if it is ever going to able to deliver on its promise to parents.’

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