Catherine McKinnell – 2014 Parliamentary Question to the HM Treasury

The below Parliamentary question was asked by Catherine McKinnell on 2014-06-17.

To ask Mr Chancellor of the Exchequer, what estimate he has made of the number of divorced and separated parents who will have to decide which of them should own a tax-free childcare account; how HM Revenue and Customs plans to resolve disputes over such decisions; and what additional resources will be committed for this purpose.

Nicky Morgan

It is estimated that of the families that will directly benefit from the Tax-Free Childcare scheme around 95% are couples and 5% are lone parents. Based on the best available data, we estimate that around half of these lone parents will be either divorced or separated.

Working lone parents are more likely to have lower income levels than working couples. More lone parents will therefore receive support for childcare through Tax Credits and then subsequently Universal Credit which is generally more generous than Tax-Free Childcare.

On the 18 March the Government published its response to the consultation on design and operation of Tax-Free Childcare which sets out that where adults in a family are unable to reach agreement about which of them should claim, HMRC will consider the facts of the case and make a decision.

The resource requirements of the scheme will be settled once the scheme’s details have been finalised.