Single Sheffield mum is left struggling to feed her children after applying for Tax-Free Childcare

Angela Heath, of Wisewood, Sheffield, who works part-time at a Parfetts Cash and Carry, at Shepcote Business Park, decided to apply for HMRC Tax-Free Childcare after nursery fees for her four-year-old daughter were going up.

But after declaring in her online application that she was receiving Working Tax Credit to support her modest income this benefit was stopped because Tax-Free Childcare claimants can only be entitled to one of the benefits which has now left her worse off.

Ms Heath said: “I had a brilliant idea because you could have 30 hours free childcare and the nursery said are you applying and I said I’m going to leave it but with nursery fees going up, bills going up and food going up, I applied online.”

The mother-of-two applied for Tax-Free Childcare in early January and once her Working Tax Credits were stopped she complained and has since tried to withdraw her application and submit an appeal but she has been told the matter is irreversible.

By the end of January, she said: “I have been to Sainsbury’s this morning and spent £22 because that is all I have got to feed my children and I cannot afford to buy anything because I have not got any money.”

Ms Heath, whose eldest daughter is aged 13, added she has been left struggling to pay her council tax, electric and gas bills and she is building up debt and is having to consider a loan.

She said: “I have never borrowed money in my life but nothing like this has ever happened before. While they have been dragging their feet I’m getting further and further into debt.”

The office of Sheffield Labour MP Gill Furniss, Member of Parliament for Sheffield Brightside and Hillsborough and Shadow Minister for Roads, told Ms Heath that any Tax-Free Childcare applications automatically make claimants ineligible for tax credits and once the applicant is removed from working tax credits ‘there is no way to get back’.

Ms Furniss’ office guided Ms Heath to a website to establish what benefits she is entitled to with the Department for Work and Pensions and the MP’s office referred her to the Citizens Advice Bureau, is contacting Sheffield City Council’s Household Support Fund, and referred her to a food bank.

An HMRC spokesman confirmed that claimants are entitled to either Working Tax Credits or Tax-Free Childcare but not both and anyone with tax credits will have them stopped once they have applied for Tax-Free Childcare.

The online Tax-Free Childcare applications include questions asking if claimants are already claiming tax credits and there is a warning that receiving tax credits or Universal Credit can affect applications.

The application also asks if the applicant wants to stop tax credits to receive Tax-Free Childcare, and if they then wish to still continue with the application.

Ms Heath said: “I wish I had just left it as it was. They are not going to rectify it and they say go for Universal Credit but that takes two months to get through. I am getting all stressed because I am worried about how I am going to pay for things.”

She added that HMRC knows she had ticked ‘yes’ to claiming Working Tax Credits and feels they should therefore know whatever happened next was a genuine mistake.

Ms Heath said she is not claiming Tax-Free Childcare because she is not eligible and now she has lost her Working Tax Credits too and claims she has had no money now since December 28.

She added: “I have had no money now since December 28 – absolutely disgusting – and for them to treat people this way is also disgusting, do they want to put people in debt?”

Mr Heath: “I would also like to add that what was a genuine mistake - even though I still believe I haven't made one – has turned my life upside down.”

She also said she has been left without any money now for nearly two months and when her bills cannot be paid she fears she will be left homeless.