Question to the HM Treasury:

To ask the Chancellor of the Exchequer, how many reports he has received of deposited funds not appearing in tax-free childcare accounts; whether those incidents have been resolved; and what steps he is taking to prevent such incidents.

Tax-Free Childcare (TFC) is delivered from GOV.UK alongside other government digital services through the secure Government Gateway. Parents apply for TFC through the online Childcare Service, which HM Revenue & Customs deliver in partnership with National Savings & Investment (NS&I).

There have been two incidents of deposited funds not appearing in TFC accounts since the scheme started in April 2017. In August 2019 3,074 TFC customers were affected by a system error, of which all funds were remediated to the correct account. Since this incident, NS&I introduced a number of additional controls; including automated system scripts which alert them to any missed or unprocessed files. When alerted NS&I evoke their industry standard Incident (ITIL) process and conform to a Service Level Agreement set with HMRC, which has a range of response and resolution times depending on the scale of the incident (such as the number of customers impacted).

More recently in December 2020 198 customers were affected by a different processing issue, which is currently being remediated.

If parents suspect their account is being misused they should contact the Childcare Service helpline to report their concerns. The Childcare Service will investigate the matter immediately.