Government review puts nurseries under pressure

Tuesday, September 5, 2017

Parents are facing soaring childcare costs as the Government's controversial business rates review heaps financial pressure on nurseries.

Our detailed analysis shows that new Rateable Values published for nurseries and play schools in England and Wales have increased by £59.34million as a result of April's property Revaluation.

Our analysis of official Government data reveals that the 11,204 nurseries and play schools liable for rates had a combined Rateable Value of £183.20million based on the last property assessment in 2010, which has formed the basis of rates bills for the last 7 years, but this has increased massively by 32.38% to £242.54million.

As a result, we project that the amount payable under the new Rateable Values averaged out over the next 5 years represents a £23.16million per year increase in tax.

Nurseries and play schools paid between them £87.56million last year before the effects of the Revaluation in rates which is set to increase over the next 5 years to £110.72million per year on average, taking the total 5 year property tax bill to £553.6million

The National Day Nurseries Association (NDNA) said nurseries are having no choice but to pass on the costs to parents or risk closure.

The organisation is calling on the Government to follow in Scotland's footsteps and consider exempting nurseries from the tax.

Such a move would hand the industry a total tax break of more than half a billion pounds over the next five years.

It comes after a long-awaited business rates review in Scotland recommended that nurseries should not have to pay the levy as part of efforts to boost free childcare.