Citation and commencement

1.  These Regulations may be cited as the Childcare Payments (Amendment) Regulations 2016 and come into force on 5th September 2016.

Amendments to the Childcare Payments Regulations 2015

2.  The Childcare Payments Regulations 2015(2) are amended as follows.

3.  In regulation 2 (interpretation) in the definition of "personal independence payment" at the end insert "or Part 5 of the Welfare Reform (Northern Ireland) Order 2015(3)".

4.  In regulation 6 (declarations of eligibility) after paragraph (4) insert-

"(5) Where a declarant or their partner is self-employed and they make(4)-

(a)the first declaration of the self-employment, the declarant must-

(i)provide any unique taxpayer's reference of the self-employment; or

(ii)confirm that the self-employed person has, for the tax year in which the reconfirmation is made, given notice to HMRC under section 7 of the Taxes Management Act 1970(5) in respect of the self-employment but has not yet received a unique taxpayer's reference;

(b)the second declaration of the self-employment, the declarant must provide any unique taxpayer's reference of the self-employed person.

(6) Any person whose partner is self-employed in another EEA state must in the course of reconfirming eligibility, provide information specified by HMRC to confirm that the partner is carrying out self-employed work in that other EEA state.

(7) In this regulation a declarant means a person who makes a declaration of eligibility for the purposes of either opening a childcare account or reconfirming eligibility.".

5.  For regulation 7 (late declarations of eligibility) substitute-

"7.-(1) If a person makes a declaration of eligibility during the entitlement period for which it is made (a "late declaration of eligibility"), HMRC may not determine whether the declaration is valid for the purposes of the Act until-

(a)7 days after the declaration was made; or

(b)such earlier time as HMRC allow.

(2) If a person ("P") makes a late declaration of eligibility P may make qualifying payments into the childcare account only for the remainder of the entitlement period after the day on which HMRC determine the declaration is valid.

(3) Where a late declaration of eligibility is made by P in circumstances where either-

(a)section 30(2) (termination of tax credit awards) applies; or

(b)P is subject to an assessment period under regulation 21 of the Universal Credit Regulations 2013(6) (assessment periods) and P's assessment period overlaps with the entitlement period;

the relevant maximum for the entitlement period is reduced to an amount determined by the formula-

(4) Paragraph (3) applies with the modification in subparagraph (5) to a resident of another EEA state who is in paid work in the United Kingdom if, at the date of the declaration, that person or that person's partner either-

(i)is, under the law of that state, being paid in respect of a relevant assessment period a credit (an "equivalent credit") which is substantially similar in character to universal credit; or

(ii)is, under the law of that state, in receipt of a credit ("an equivalent credit") which is substantially similar in character to an award of tax credit; or

(iii)has made a claim that would result in an equivalent credit becoming payable to that person or that person's partner.

(5) The modification in this paragraph is a reference to universal credit and tax credit includes a reference to an equivalent credit.".

6.  In regulation 11 (opening a childcare account) omit paragraphs (1)(d), (2) and (3).

7.  In regulation 17 (compensatory payments)-

(a)in paragraph (1) for "paragraphs (2) and (3)" substitute "paragraphs (2), (3) and (3A)";

(b)after paragraph (3) insert-

"(3A) The circumstances specified in this paragraph are that a person is unable to open a childcare account for a continuous period of at least 14 days, due to a serious technical failure affecting HMRC or the account provider.";

(c)in paragraph (4)(a) for "paragraph (2) or (3)" substitute "paragraphs (2), (3) or (3A)".

8.  In regulation 18 (account restriction orders)-

(a)in paragraph (1)(a) before (2) insert "(1A), (1B),";

(b)after paragraph (1) insert-

"(1A) The condition specified in this paragraph is that an amount has been assessed and notified to a person under section 41 (assessment and enforcement of recoverable amounts) in relation to any of sections 35 to 38 (recovery of top up payments).

(1B) The conditions specified in this paragraph are that-

(i)an amount has been assessed and notified to a person under section 41 in relation to sections 39 or 40 (recovery of top up payments); and

(ii)some or all of the amount assessed has not been paid to HMRC by the time specified in section 41(5).".

(c)in paragraph (2)(a)-

(i)omit "41 or";

(ii)omit "recoverable amounts or";

(d)at paragraph 2(b) omit "41(5) or";

(e)at the end of paragraph (7)(b) for "." substitute ";";

(f)after paragraph (7)(b) insert-

"(c)may be imposed where the account holder agrees to this action;

(d)must be revoked where the account holder, having previously agreed to the imposition under subparagraph (7)(c) above, requests a review of the decision to make the account restriction order.".

9.  In regulation 22 (use of electronic communications)-

(a)at the end of paragraph (3)(b) omit "or";

(b)at the end of paragraph (3)(c)(iv) for "." substitute "; or";

(c)after paragraph (3)(c)(iv) insert-

"(d)is prevented, for a continuous period of at least 7 days, by a technical failure affecting HMRC, from making a declaration or application.".

EXPLANATORY NOTE

(This note is not part of the Regulations)

These Regulations amend the Childcare Payments Regulations 2015 (S.I. 2015/522) ("the 2015 Regulations") which provide for the administration of childcare accounts and top-up payments made under the Childcare Payments Act 2014 (c. 28) ("the Act") and for other procedural matters in relation to the childcare payments scheme.

Regulation 3 amends the definition of "personal independence payment" ("PIP") in the 2015 Regulations by adding a definition for Northern Ireland following the introduction of PIP's from 20 June 2016 in Northern Ireland.

Regulation 4 amends regulation 6 of the 2015 Regulations which provides for specifying the time for making a declaration of eligibility and when it will be determined as valid by HMRC. The amendment requires persons who are self-employed, and are making a declaration of eligibility to provide a Unique Taxpayer Reference (UTR) or to confirm they are yet to receive such a reference. The UTR is a reference number provided by HMRC to taxpayers when they register for self-assessment.

Regulation 5 amends regulation 7 of the 2015 Regulations which provides for late declarations of eligibility and its consequences. The amendment disallows pro-rating of qualifying payments into childcare accounts in cases of late declaration, except where parents or their partners have received Universal Credit ("UC") or Tax Credit ("TC") at any time during the entitlement period. This also applies to a resident of another EEA state working in the UK, and either they or their partner receives a credit equivalent to UC or TC.

Regulation 6 amends regulation 11 of the 2015 Regulations which provides for the form and procedure for opening a childcare account. These amendments are consequential to amendments made to regulation 6 of the 2015 regulations.

Regulation 7 amends regulation 17 of the 2015 Regulations which prescribes the circumstances where a compensatory payment under section 62 of the Act may be made. This amendment provides an additional circumstance where such a payment can be made. It will compensate parents who are unable to receive top-up payments due to not being able to open a childcare account for a continuous period of 14 days because of a serious technical failure affecting HMRC or the account provider.

Regulation 8 amends regulation 18 of the 2015 Regulations. The amendment extends the circumstances in which an account restriction order can be made to cases where a parent or partner has applied for UC or TC and also cases where an account holder agrees to an account restriction order being made.

Regulation 9 amends regulation 22 of the 2015 Regulations which provides that applications to open an account and declarations of eligibility must in most circumstances be sent to HMRC electronically and that an account provider must make payments in respect of qualifying childcare electronically. There are certain exceptions to this. The amendment adds a further exception where the use of non-electronic routes to either make a declaration of eligibility or an application for childcare payments is permitted. These non-electronic routes will be permitted if there is a technical failure affecting HMRC for a continuous period of at least 7 days.

A full Impact Assessment of the effect that the childcare payments scheme will have on the costs of business and the voluntary sector was published on 18th November 2014 alongside The Childcare Payments Act 2014 and is available from the gov.uk website at https://www.gov.uk/government/publications/tax-free-childcare-impact-assessment. It remains an accurate summary of the impacts that apply to this instrument.