HMRC is considering rebranding the tax-free childcare scheme to boost uptake.
Last month, Money Mail revealed how £2.8 billion was going unclaimed every year.
Campaigners and MPs said more needs to be done to raise awareness after figures showed HMRC spent only £197,338 advertising the perk in 2020-21.
Campaigners and MPs said more needs to be done to raise awareness after figures showed HMRC spent only £197,338 advertising the perk in the year 2020-21
Tax-free childcare tops up 20p for every 80p parents spend on nannies and nurseries — the equivalent of basic-rate income tax.
It offers a maximum saving of £2,000 per child per year, or £4,000 for a disabled child.
To boost take-up, HMRC commissioned a research report which suggested the name should be changed.
It reads: ‘Both parents and providers had largely negative associations with the name ‘tax-free childcare’, especially the word ‘tax’. The name generated a number of misconceptions and doubts.’
Alternatives were considered, such as Childcare Payments and Childcare Support, with the report concluding that renaming the scheme would be ‘beneficial’ but ‘other barriers to use remain’.
Joeli Brearley, from the charity Pregnant Then Screwed, says: ‘It is not the name that is the problem. This Government has shown once again it is incapable of properly getting to grips with the childcare issue.’
Mothers told Money Mail they were unaware the scheme existed and found the application process confusing.
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