In February, the government’s tax-free childcare account system encountered a problem that led to duplicate payments in certain accounts. In my particular case, a payment of £779 into my daughter’s account was mistakenly credited five times. As a result, the affected accounts were frozen while efforts were made to recover the excess payments. However, even after five months, my daughter’s account remains frozen, preventing me from accessing the funds needed to pay her nursery bills. Additionally, I am unable to make any new payments into the account in order to take advantage of the tax-free allowance. Despite my attempts to seek answers, each time I reach out for assistance, I am informed that there is no estimated timeline for resolution. This situation has caused significant inconvenience and frustration for me and other affected individuals.
Tax-free childcare is a government initiative designed to provide financial support for the cost of childcare. Under this scheme, for every £8 contributed by a parent, the state adds a £2 top-up. Unfortunately, in February, the banking provider used by NS&I, which oversees the scheme, encountered an error that resulted in over 8,000 families being locked out of their accounts. Due to this error, these families received a collective sum of £18.6m in top-ups, instead of the expected £3.1m. Consequently, some families were even at risk of losing their nursery placements as they were unable to pay the necessary fees.
In order to rectify the issue, each affected account had to be manually adjusted. When I reached out to HM Revenue & Customs for assistance, I was informed that roughly 30 accounts were still frozen. While HMRC claims to have provided regular updates to customers, in your case, you had to persistently chase for news. However, after my intervention, your account was successfully unfrozen within two days, and I have been assured that the remaining 30 accounts have also been resolved.
Furthermore, HMRC has acknowledged its shortcomings and has expressed its intention to send letters of apology for the inconvenience caused. Additionally, an agent contacted you to discuss the situation. You can expect to receive the £320 due in top-ups soon.
For others who have been affected, there is an opportunity to submit a form to apply for retrospective credits and associated costs. This ensures that those impacted are reimbursed appropriately for any losses incurred.
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