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Childcare Payments BillPage 10

(2) If the Director provides childcare accounts, the Director must in doing so act in
accordance with any arrangements made between the Director and the
Commissioners with respect to the provision of childcare accounts.

(3) Arrangements made between the Commissioners and a person or body within
5paragraph (b) or (c) of subsection (1) may include provision for the making of
payments by the Commissioners to the person or body in respect of the
provision of childcare accounts (and accordingly nothing in section 15(8) or (9)
affects the inclusion of such provision in the arrangements).

(4) If the Commissioners provide childcare accounts—

(a) 10any reference to the account provider paying an amount to HMRC
from a childcare account, or to HMRC directing the account provider to
do so, is to be read as a reference to HMRC deducting the amount from
the account,

(b) any requirement for the account provider to notify HMRC of any
15matter, or for HMRC to notify the account provider of any matter, is to
be disregarded, and

(c) any requirement for the account provider to give anything to HMRC,
or for HMRC to give anything to the account provider, is to be
disregarded.

17 20Opening a childcare account

(1) A person who wishes to receive top-up payments (the “applicant”) must make
an application to HMRC to open a childcare account.

(2) HMRC may grant the application only if—

(a) the applicant has made a valid declaration of eligibility,

(b) 25the child in respect of whom the account is to be held (“the relevant
child”) is a qualifying child at the date of the application, and

(c) on the day on which the application is granted, there is no other person
who holds an active childcare account in respect of the relevant child
(see subsection (3)).

(3) 30For the purposes of this Act a childcare account is “active” at any time if—

(a) qualifying payments may be made into the account at that time (see
section 19), or

(b) such payments could, in the absence of section 19(4) (limit on amount
of qualifying payments that may be made in entitlement period), be
35made into the account at that time.

(4) Regulations may make further provision about opening a childcare account,
including, in particular—

(a) provision about the making of applications to open a childcare account,
including provision enabling HMRC to specify the form and manner in
40which such applications may be made;

(b) provision specifying, or enabling HMRC to specify, information which
applicants must provide to specified persons or to persons of a
specified description;

(c) provision specifying circumstances in which a person, or a person of a
45specified description, may make an application to open a childcare
account on behalf of an applicant, including provision enabling HMRC
to appoint a person for that purpose;

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(d) provision requiring HMRC to provide specified information to
specified persons or to persons of a specified description.

(5) In subsection (4) “specified” means specified in the regulations.

18 Cases where there is more than one eligible person

(1) 5If two or more persons have applied to open a childcare account in respect of
the same child, HMRC may determine which of them (if any) may open a
childcare account in respect of the child.

(2) If—

(a) a person—

(i) 10has applied to open a childcare account in respect of a child, or

(ii) wishes to make a declaration of eligibility in relation to a
childcare account held in respect of a child, and

(b) another person holds a childcare account in respect of the child,

HMRC may determine which of them (if any) may hold an active childcare
15account in respect of the child (see section 17(3)).

(3) For provision enabling HMRC to make an account restriction order to give
effect to a determination under subsection (2), see section 24.

19 Payments into childcare accounts

(1) In this Act “qualifying payment” means any payment made into a childcare
20account, other than—

(a) a top-up payment, or

(b) a repayment of the whole or part of any payment made from the
childcare account.

But for the purposes of paragraph (b) a withdrawal made by the account-
25holder is not to be regarded as a payment made from a childcare account.

(2) Any person (including the account-holder) may make a qualifying payment
into a childcare account during an entitlement period, provided that—

(a) the account-holder has made a valid declaration of eligibility for the
entitlement period, and

(b) 30the child in respect of whom the account is held is a qualifying child at
the time of the payment.

This is subject to any provision made by or under this Act.

(3) More than one qualifying payment may be made into a childcare account
during an entitlement period.

(4) 35But the sum of any qualifying payments made into a childcare account in an
entitlement period must not exceed the relevant maximum for the entitlement
period.

(5) The relevant maximum for an entitlement period is £2,000.

This is subject to subsection (6).

40This is subject to subsection (6).

(6) Regulations may provide, or enable HMRC to provide, that in circumstances
specified in the regulations the relevant maximum for an entitlement period is
an amount—

(a) specified in, or determined in accordance with, the regulations, or

Childcare Payments BillPage 12

(b) determined by HMRC in accordance with powers conferred by the
regulations.

(7) Regulations may amend subsection (5) so as to substitute a different amount or
amounts for any amount for the time being specified there.

(8) 5For the purposes of subsection (4), any amount paid into a childcare account at
any time during an entitlement period is to be disregarded if at a later time
during the entitlement period an equivalent amount is withdrawn from the
account by the account-holder.

(9) The account provider must notify HMRC of any qualifying payments made
10into a childcare account.

20 Payments that may be made from childcare accounts

(1) The only payments which the account-holder may authorise to be made from
a childcare account are—

(a) payments in respect of qualifying childcare for the relevant child, and

(b) 15withdrawals made by the account-holder.

(2) In this section “the relevant child”, in relation to a childcare account, means the
child in respect of whom the account is held.

(3) A payment within subsection (1) is referred to in this Act as a permitted
payment.

(4) 20A payment made from a childcare account which—

(a) is not a permitted payment, and

(b) is not made by the account provider to HMRC under this Act,

is referred to in this Act as a prohibited payment.

(5) Permitted payments may be made from a childcare account in an entitlement
25period whether or not the account-holder has made a valid declaration of
eligibility for the entitlement period.

(6) Where—

(a) a payment is made from a childcare account, and

(b) only part of the payment is in respect of qualifying childcare for the
30relevant child,

so much of the payment as is properly attributable to the costs of qualifying
childcare for the relevant child is to be treated as a permitted payment, and the
remainder is to be treated as a prohibited payment.

(7) Regulations may make provision for determining, for the purposes of
35subsection (6), how much of a payment is properly attributable to the costs of
qualifying childcare for the relevant child.

(8) For the meaning of “qualifying childcare”, see section 2.

21 Calculating the top-up element of payments etc

(1) For the purposes of this Act the “top-up element” of any amount is an amount
40equal to the relevant percentage of that amount.

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(2) The “relevant percentage” is the percentage given by—


where R is the percentage for the time being specified in section 1(4).

22 Withdrawals

(1) 5Where the account-holder makes a withdrawal from a childcare account, the
account provider must pay the corresponding top-up amount to HMRC from
the childcare account.

(2) The “corresponding top-up amount”, in relation to a withdrawal, is R% of the
amount of the withdrawal, where R is the percentage for the time being
10specified in section 1(4).

(3) Accordingly, the maximum amount that may be withdrawn from a childcare
account at any time is the relevant percentage of the total amount of funds held
in the account at that time.

(4) The “relevant percentage” is the percentage given by—


15

where R is the percentage for the time being specified in section 1(4).

(5) A withdrawal may not be made from a childcare account at any time when a
top-up payment is payable into the account.

23 Refunds of payments made from childcare accounts

(1) 20Where—

(a) a payment is made to a person from a childcare account, and

(b) the whole or part of the payment is repayable by that person to the
account-holder,

so much of the payment as is repayable must be repaid by that person into the
25childcare account.

(2) Where—

(a) a payment made to a person consists of an amount paid from a
childcare account and an amount that is not paid from the childcare
account, and

(b) 30the whole or part of the payment (“the repayable amount”) is repayable
by that person to the account-holder,

so much of the repayable amount as exceeds the amount not paid from the
childcare account must be repaid by that person into the childcare account.

24 Imposing restrictions on accounts

(1) 35If such conditions as may be specified in regulations are met, HMRC may make
an account restriction order.

(2) An “account restriction order” is an order imposing any of the following
restrictions in relation to a childcare account specified in the order—

(a) a restriction that prevents the making of any qualifying payments into
40the childcare account;

Childcare Payments BillPage 14

(b) a restriction that prevents the making of any payments from the
childcare account in respect of qualifying childcare.

(3) Regulations may, in particular, provide that HMRC may make an account
restriction order where—

(a) 5a person wishes—

(i) to open a childcare account in respect of a child, or

(ii) to make a declaration of eligibility in relation to a childcare
account held in respect of a child, and

(b) another person holds a childcare account in respect of the child.

(4) 10Regulations may make further provision about account restriction orders,
including, in particular—

(a) provision about the procedure for making an account restriction order;

(b) provision enabling an account restriction order to impose a restriction
for a period specified in the order (which may be unlimited);

(c) 15provision enabling an account restriction order to provide that a
restriction does not apply in such cases as may be specified in the order;

(d) provision enabling a person who wishes to open a childcare account or
make a declaration of eligibility to apply to HMRC for an account
restriction order to be made in relation to another person who holds a
20childcare account;

(e) provision enabling an account restriction order to be revoked,
including provision for the account-holder to apply for its revocation;

(f) provision specifying the circumstances in which such an application
may be granted.

(5) 25If an account restriction order is made in relation to a childcare account—

(a) HMRC must give a copy of the order to the account-holder and to the
account provider, and

(b) the account provider must comply with the order.

25 Closure of childcare accounts

(1) 30Regulations may make provision about closing childcare accounts.

(2) The provision that may be made by regulations under this section includes, in
particular—

(a) provision requiring a childcare account to be closed in specified
circumstances or if specified conditions are met;

(b) 35provision about what is to happen to any funds held in a childcare
account when it is closed;

(c) provision for the repayment to HMRC of a proportion of any such
funds, calculated in accordance with the regulations.

(3) In subsection (2) “specified” means specified in the regulations.

Childcare Payments BillPage 15

Information

26 Power to obtain information or documents

(1) HMRC may by notice in writing require a person of a description specified in
regulations to provide information or documents which HMRC require in
5connection with their functions under this Act.

(2) HMRC may require a person to provide information or a document only if it is
in the person’s possession or power.

(3) Regulations may make provision about notices under subsection (1),
including, in particular—

(a) 10provision requiring a notice to contain information specified in the
regulations;

(b) provision requiring, or enabling a notice to require, information or
documents to be provided in a form or manner specified in the
regulations or the notice;

(c) 15provision requiring, or enabling a notice to require, information or
documents to be provided at a time, or within a period, specified in the
regulations or the notice;

(d) provision requiring, or enabling a notice to require, information or
documents to be provided in respect of a period specified in the
20regulations or the notice;

(e) provision specifying descriptions of information or document which a
notice may not require a person to provide;

(f) provision about determining in specified cases whether information or
documents are of such a description, including provision for that
25determination to be made by a person or body specified in the
regulations.

27 Information sharing between HMRC and others

(1) Subsection (2) applies to information which is held as mentioned in section
18(1) of the Commissioners for Revenue and Customs Act 2005
30(confidentiality).

(2) Information to which this subsection applies may be disclosed to any person
for use for the purpose of enabling or assisting the exercise of any of the
functions of HMRC under this Act.

(3) Information disclosed in reliance on subsection (2) may not be further
35disclosed to any other person without the authority of the Commissioners
(which may be general or specific).

(4) A person who holds information may disclose that information to HMRC if the
disclosure is made for the purposes of the exercise by HMRC of their functions
under this Act.

(5) 40This section does not limit the circumstances in which information may be
disclosed apart from this section.

(6) In section 127 of the Welfare Reform Act 2012 (information-sharing between
Secretary of State and HMRC), in subsection (7), in the definition of “HMRC
function”—

(a) 45at the end of paragraph (a), omit “or”, and

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(b) at the end of paragraph (b) insert , or

(c) which is conferred by or under the Childcare Payments
Act 2014;.

28 Wrongful disclosure of information received by others from HMRC

(1) 5If revenue and customs information relating to a person is disclosed in
contravention of section 27(3) and the identity of the person—

(a) is specified in the disclosure, or

(b) can be deduced from it,

section 19 of the Commissioners for Revenue and Customs Act 2005 (wrongful
10disclosure) applies in relation to the disclosure as it applies in relation to a
disclosure of such information in contravention of section 20(9) of that Act.

(2) “Revenue and customs information relating to a person” has the meaning
given by section 19(2) of the Commissioners for Revenue and Customs Act
2005.

15Special rules affecting tax credit and universal credit claimants

29 Termination of tax credit awards

(1) In this section “the relevant day”, in relation to a person who has made a
declaration of eligibility for an entitlement period, means—

(a) the first day of the entitlement period, or

(b) 20if later, the day on which the declaration of eligibility for the
entitlement period was made.

(2) This subsection applies where—

(a) a person (“P”) has made a valid declaration of eligibility for an
entitlement period,

(b) 25an award of a tax credit is or has been made—

(i) to P or to a person who is P’s partner on the relevant day
(whether on a single claim or a joint claim), or

(ii) to both of them on a joint claim, and

(c) the award is for a period that includes the relevant day.

(3) 30Where subsection (2) applies, the award of the tax credit terminates
immediately before the relevant day, regardless of whether the decision on the
claim was made before or after the relevant day.

This is subject to subsections (4) to (7).

This is subject to subsections (4) to (7).

(4) 35Where a person has made a valid declaration of eligibility for more than one
entitlement period beginning during the determination period (see subsection
(5)), the award of the tax credit is terminated immediately before the day which
is the relevant day in relation to the first of those entitlement periods.

(5) In subsection (4) the “determination period”, in relation to an award of a tax
40credit, means the period—

(a) beginning with the day on which the claim for the tax credit was made,
and

(b) ending with the day on which the decision on the claim was made.

(6) Where—

Childcare Payments BillPage 17

(a) a person has applied for a review under section 21A of the Tax Credits
Act 2002 of a decision not to make an award of a tax credit or to
terminate such an award, and

(b) the conclusion on the review is that the decision is varied or cancelled,

5subsection (3) does not apply in respect of the award in relation to any
entitlement period beginning before the day on which the person is notified of
the conclusion on the review.

(7) Where—

(a) a person has brought an appeal under section 38 of the Tax Credits Act
102002 against a decision not to make an award of a tax credit or to
terminate such an award, and

(b) the appeal is upheld,

subsection (3) does not apply in respect of the award in relation to any
entitlement period beginning before the day on which the person is notified of
15the decision on the appeal.

(8) Where an award of a tax credit made to a person is terminated by virtue of this
section—

(a) HMRC must notify the person of that fact,

(b) the tax credits legislation applies in relation to the person with such
20modifications as may be made in regulations, and

(c) the amount of any tax credit to which the person is entitled is to be
calculated in accordance with the tax credits legislation, subject to any
such modifications of that legislation.

(9) Regulations may make further provision for the purpose of securing that,
25where a person makes a valid declaration of eligibility, any entitlement of the
person, or a person who is the person’s partner, to payments under the tax
credits legislation ceases immediately before the relevant day.

(10) Regulations under subsection (9) may, in particular—

(a) provide that the tax credits legislation applies in relation to the person
30whose entitlement to such payments has ceased with such
modifications as may be specified in the regulations, and

(b) apply any provision of this section with such modifications as may be
so specified.

(11) If—

(a) 35a person makes a declaration of eligibility for an entitlement period,
and

(b) at any time after the relevant day HMRC determine that the declaration
was not valid,

that does not affect anything done by virtue of this section as a result of the
40making of the declaration.

(12) In this section—

(13) This section ceases to have effect when the repeal of Part 1 of the Tax Credits
Act 2002 made by Schedule 14 to the Welfare Reform Act 2012 has fully come
into force.

Childcare Payments BillPage 18

30 Power to provide for automatic termination of universal credit

(1) Regulations may make provision for the purpose of securing that, where a
person has made a valid declaration of eligibility—

(a) any award of universal credit made to the person, or to a person who is
5the person’s partner, is terminated,

(b) any claim which the person, or a person who is the person’s partner,
has made for universal credit may not be proceeded with, and

(c) any entitlement of the person, or a person who is the person’s partner,
to payments under relevant social security legislation ceases.

(2) 10The provision that may be made by regulations under subsection (1)
includes—

(a) provision amending this Act, including—

(i) provision amending or repealing section 11, and

(ii) provision made in consequence of any provision made by
15regulations under subsection (1);

(b) provision conferring power on the appropriate national authority to
make regulations containing—

(i) provision about calculating, in a case falling within subsection
(1)(a) to (c), the amount of any payment to which a person is
20entitled;

(ii) provision modifying the application of any relevant social
security legislation, or any provision made under any such
legislation, in such a case.

(3) In subsection (2)(b) “the appropriate national authority” means—

(a) 25in relation to universal credit payable under Part 1 of the Welfare
Reform Act 2012, the Secretary of State;

(b) in relation to universal credit payable under any provision made for
Northern Ireland which corresponds to that Part of that Act, a Northern
Ireland department.

(4) 30The following is “relevant social security legislation” for the purposes of this
section—

(a) the Social Security Administration Act 1992;

(b) the Social Security Administration (Northern Ireland) Act 1992;

(c) the Social Security Act 1998;

(d) 35the Social Security (Northern Ireland) Order 1998 (S.I. 1998/1506S.I. 1998/1506 (N.I.
10));

(e) Part 1 of the Welfare Reform Act 2012;

(f) any provision made for Northern Ireland which corresponds to that
Part of that Act.

31 40Power to disqualify tax credit claimants from obtaining top-up payments

(1) This section applies in relation to a person (“P”) if —

(a) P, or a person who is P’s partner, makes a claim (whether a single or a
joint claim) that results in an award of a tax credit being made for a
relevant period (see subsection (2)),

(b) 45the claim is made during an entitlement period for which P or P’s
partner has made a valid declaration of eligibility,

Childcare Payments BillPage 19

(c) there has not been a change of circumstances in relation to P or P’s
partner since the beginning of the entitlement period, and

(d) P, or a person who is P’s partner, makes a declaration of eligibility
within the period of 12 months beginning with the day on which the
5claim was made.

(2) In subsection (1)(a) “relevant period”, in relation to an entitlement period,
means a period that includes the whole or any part of the entitlement period.

(3) If this section applies in relation to a person, HMRC may give the person a
warning notice.

(4) 10A warning notice is a notice stating that, if this section or section 32 (power to
disqualify universal credit claimants from obtaining top-up payments) applies
in relation to the person at any time during the period of 4 years beginning
with the day on which the notice is given, HMRC may give the person a
disqualification notice (see section 33).

(5) 15Regulations may make provision—

(a) about what is, or is not, to be regarded as a change of circumstances in
relation to a person for the purposes of this section;

(b) specifying cases in which something which would otherwise be a
change of circumstances is not to be treated as such for the purposes of
20this section.

(6) Regulations may amend subsection (1)(d) so as to substitute a different period
for the period for the time being specified there.

(7) In this section “joint claim” and “single claim” have the same meaning as in the
Tax Credits Act 2002.

32 25Power to disqualify universal credit claimants from obtaining top-up
payments

(1) This section applies in relation to a person (“P”) if —

(a) P, or a person who is P’s partner, makes a claim (whether jointly or
otherwise) that results in universal credit becoming payable for a
30relevant assessment period (see subsection (2)),

(b) the claim is made during an entitlement period for which P or P’s
partner has made a valid declaration of eligibility,

(c) there has not been a change of circumstances in relation to P or P’s
partner since the beginning of the entitlement period, and

(d) 35P, or a person who is P’s partner, makes a declaration of eligibility
within the period of 12 months beginning with the day on which the
claim was made.

(2) In subsection (1)(a) “relevant assessment period”, in relation to an entitlement
period, means any assessment period (within the meaning of the relevant
40legislation) that includes the whole or any part of the entitlement period.

(3) If this section applies in relation to a person, HMRC may give the person a
warning notice.

(4) A warning notice is a notice stating that, if this section or section 31 (power to
disqualify tax credit claimants from obtaining top-up payments) applies in
45relation to the person at any time during the period of 4 years beginning with

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