TFC20200 - Entitlement periods: variation of entitlement periods

Childcare Payments Regulations 2015, regulation 5

HMRC may vary the length of an entitlement period by no more than 2 months:

Childcare Payments Regulations 2015, regulation 5(1)(a)

On the opening of a childcare account in relation to a person’s first entitlement period, or;

Childcare Payments Regulations 2015, regulation 5(1)(b)

On the opening of a childcare account for a person’s second or subsequent child (e.g., to align entitlement periods for siblings), or;

Childcare Payments Regulations 2015, regulation 5(1)(c)

In order to align the entitlement periods of two account holders (e.g. on the forming of a new household), or;

Childcare Payments Regulations 2015, regulation 5(1)(d)

In order to align the entitlement period of an account holder with the declaration period of their partner who has a 30 hours free childcare declaration period rather than a TFC entitlement period.

Childcare Payments Regulations 2015, regulation 5(2)

In such cases the maximum qualifying payment is determined by the formula: X × A / 91. X is, in the case of a disabled child, £4,000, or in the case of any other child, £2,000. A is the number of days in the varied entitlement period.

Example:

Alex holds an active childcare account for his son Eric and his entitlement period ends on 31 March 2018. Alex makes a new declaration of eligibility for Eric on 1 March 2018. HMRC vary the length of his new entitlement period to align it with his existing entitlement period.

Using the formula X x A / 91, we can work out the maximum Alex can pay into Eric’s childcare account for the varied entitlement period. £2,000 (X) x 31 (A) / 91 = £681. This is the maximum amount of money Alex can pay into the childcare account for Eric that will attract a top-up payment from HMRC.