TFC50800 | Recovering top-up payments: other cases

Childcare Payments Act 2014, section 40

Section 40 sets out other circumstances when HMRC will be able to recover top-up payments. The scenarios where top-up payments will be recoverable are listed below.

Childcare Payments Act 2014, section 40(1)(a) and (b)

If a top-up payment is made into a childcare account and the account holder is not entitled to the top-up payment, the account holder is liable to pay HMRC an amount equal to the amount of the top-up payment.

Childcare Payments Act 2014, section 40(2)(a) and (b)

If a person who holds a childcare account causes or permits a prohibited payment to be made from the account and at the time of the payment the person knew, or ought to have known, that the payment was a prohibited payment, the person is liable to pay HMRC an amount not exceeding the top-up element of the prohibited payment.

Section 21 of the Act sets out how the top-up element of a prohibited payment is to be calculated (see TFC35300).

Childcare Payments Act 2014, section 40(3)

If a person fails to make a payment in accordance with a requirement imposed by subsections (1) to (3) of section 23 (refunds of payments made from childcare accounts) of the Act, they are liable to pay HMRC the top-up element of that payment.

Childcare Payments Act 2014, section 40(4)

If a prohibited payment is made to a person from a childcare account as a result of the dishonesty of that or some other person, each of those persons is liable to pay HMRC the top-up element of the prohibited payment.

Childcare Payments Act 2014, section 40(5)

Where a body corporate is liable to pay an amount to HMRC and the liability is attributable (wholly or partly) to the dishonesty of a person below, that person (as well as the company) is liable to pay that amount to HMRC.

Childcare Payments Act 2014, section 40(6)

Those persons are:

Childcare Payments Act 2014, section 40(6)(a)

A director, manager, secretary, or similar officer of the body corporate, or;

Childcare Payments Act 2014, section 40(6)(b)

Any person who was purporting to act in such a capacity, or;

Childcare Payments Act 2014, section 40(7)

A member, if the affairs of a body corporate are managed by its members, in connection with the management, as if the member were a director of the company.

Childcare Payments Act 2014, section 40(8)

Where a Scottish firm is liable to repay an amount as a result of dishonesty by a partner or by a person purporting to act as a partner, both that person and the partnership will be liable to pay that amount to HMRC.