Clause 39 - Recovery of top-up payments in other places

Part of Childcare Payments Bill – in a Public Bill Committee at 9:25 am on 28 October 2014.

Alert me about debates like this

Photo of Priti Patel Priti Patel The Exchequer Secretary 9:25, 28 October 2014

Clause 39 sets out other cases in which HMRC can recover top-up payments that have been made to parents and completes the set of clauses about payment recovery.

The clause allows HMRC to recover top-up payments if they are made to a person who is not entitled to them. It also allows it to recover such payments when they have been spent on something other than qualified child care. As I explained when we considered clause 20 last week, such a payment is known as a prohibited payment.

The clause also allows HMRC to recover top-up payments when a repayment is made directly to an account holder. That might occur when, contrary to the requirement in clause 23, a child care provider makes a repayment directly to a parent, rather than into the child care account. Part of that repayment will represent the top-up payment from the Government, so the parent will be liable to pay the top-up element to HMRC.

When a prohibited payment has been made, there is provision in the clause to recover funds from any person who dishonestly caused or allowed that payment to be made. It is possible, for instance, for there to be collusion between a parent and a child care provider, and the clause will ensure the effective recovery of public funds in such circumstances. HMRC’s ability to recover top-up payments extends to cases where such payments have been made due to the dishonesty of a director or officer of a company.

We anticipate that the vast majority of parents will comply with the scheme rules and that HMRC will not have to recover top-up payments from them. However, the clause is needed to deal with cases in which that is not the case. Specifically on the hon. Lady’s question, HMRC will have the ability to recover payments from parents, but its technical means and the way it functions will also give it the ability to pay into accounts. There should, therefore, be no problem with recovering top-up payments or putting money back into accounts.

It is worth highlighting again that we have talked extensively about keeping the scheme simple—simplicity is at its core. That is very much about ensuring that information about registration and children is correct so that there is no room for errors to occur.