7 September 2016

Childcare provided in another EU Member State

A recent decision by the Northern Ireland Social Security Commissioner concludes that although a childcare provider is located outside the UK and does not fall within the defined categories in the tax credit regulations it can still be qualifying childcare for tax credit purposes.

The case concerns a claimant who lived in Northern Ireland and worked in the Republic of Ireland and used a childcare provider based in the Republic of Ireland. Initially, HMRC accepted her childcare costs but then later revised the decision and excluded them on the grounds they weren’t qualifying childcare costs because the provider wasn’t duly registered under the terms of the tax credit rules.

The decision, explores the arguments in some depth and hinges to a large part on EU principles, enshrined into UK law, governing the right to provide and receive services. In fact, it goes further and sheds doubt on the structure of specific tax credit rules which HMRC operate to include childcare provided by certain accredited schemes outside the UK, designed predominantly to cover crown servants posted abroad.

This decision may have implications for others, notably claimants who regularly work in another EU country, such as Republic of Ireland, and who use or would like to use, child care provided outside the UK.

The case was argued by the NI Law Centre. You can read the full decision on the Rightsnet website,