Childcare debt and hmrc

[Suzi130]

Hi I have a query I got myself into a bit of a problem with my childcare bill and had a some debt to them when my child finished. I had been paying it back weekly but my circumstances have changed recently again and I don't get as much money so haven't been able to pay it in a few weeks. Everytime I speak to the nursery they tell me they will have to report me to hmrc for fraud for getting childcare tax credits and not paying but hmrc only paid a percentage of my nursery fees I had to pay the rest. I have now had contact from the nursery saying that hmrc letters are starting to arrive with them??!? I haven't been claiming tax credits from my child left the nursery so why would they be? Has anyone any experience with this would hmrc be contacting the nursery or are they just trying to use scare tactics on me? I have already had the checks done on my childcare just before my child left so I can't see why they would be in contact with them again

So do you owe the nursery outstanding fees , against which you have been paid tax credits, or did HMRC overpay you ?

No I owe the nursery outstanding fees once my child left the nursery I let tax credits know and they ended my claim from that date

So as far as HMRC they have paid you tax credits but you haven't passed the money on to the nursery ?

Well my child was in nursery for almost 3 years and my debt to the nursery is about 900 ... My childcare cost over them years and what I have paid would be well over the amount the tax credits have paid me? I am paying it I don't intend not to pay it just wondering would hmrc be sending letters 6 months after my child stopped going

It might help if you give figures if you want advice, otherwise people will think you might have had hundreds of pounds that you have spent on yourself rather than where it was supposed to go iyswim.

Sorry x post

I doubt HMRC have any involvement with it at all, they are probably just trying to get their money off you.

To scare you into it with mentioning HMRC I mean.

I'm a childminder and yes tax credits do contact us to request and confirm details to support claims.

Would hmrc contact you 6 months after the child no longer goes when even after they have already done a childcare review just before that where I had to get letters and stuff to show the hours she attended and the costs which I sent to them and they said it was all ok?

Yes I've had information requests more than two years after children have left. And more often than not, parent had already sent their paperwork through and I was just confirming what she had given them was still current and had not been updated since (ie hours reduced).

But they aren't putting it that way they are saying that they are starting to get letters from them as if they are asking am I paying it or something. I have no problem with them checking the dates am costs cause I believe I have given them all the correct information just wondering is the nursery using scare tactics to make sure I pay.

Well they are probably getting fed up with chasing your debt. Not saying that's right but if you've stopped paying it then they are probably going to see if they need to report it.

I totally understand I don't intend not to pay it I don't want to have debt hanging over my head I want it cleared. I had been paying £50 a week to them I only work part time I just can't afford to keep paying £50 a week that's almost half my monthly wage so will have to arrange with them to make a more affordable payment.

I think if you keep the lines of communication open then that's something I would be happy with. :-)

Over how long did the debt build up, presumably you were still receiving tax credits during that so HMRC would be unlikely to accept that the money you had paid was directly from their tax credits. Have you spoken to HMRC yourself ? Agree it may be a tactic to recover your money though

They're scaremongering you. HMRC give money towards childcare costs. I can't see them chasing you on behalf of the nursery. At ours we would take you down the court route.

Sorry only court if no payment arrangement was made!

HMRC do check up and they may well be checking a previous tax year, such as 2012/13 or 2013/14. If you have evidence of your childcare cost (invoices from the nursery) and evidence of payments to the nursery, then as long as the amount HMRC have paid you has been paid to the nursery then I don't see a big problem. The remaining amount is your personal debt to the nursery.

Have you got a repayment plan agreed with the nursery? You say you are paying £50 a month but has that been agreed? They are within their rights to demand the full payment, they may be able to charge a little interest and late payment admin fees. They will eventually take you through small claims court to get payment, though they may not bother as you are currently paying something and the court may not say that you have to pay it in lump sum, plus enforcing a debt repayment can be costly such as using bailiffs.

I think they are just trying to get you to pay the debt off quicker. I don't blame then for trying. As the amount of debt drops, can you get a bank loan to pay it off lump sum, then pay off the bank loan with monthly payments?

Ask them to show you the letters......

But you do need to pay them as soon as you can.