Petition launched to exempt nurseries from business rates

A petition has been launched by a nursery owner to make nurseries exempt from business rates and VAT costs.

Nursery worker with child

 

An official petition asking Government to exempt all early years settings in England from paying business rates and be zero rated for VAT has been launched by an early years provider.

Debbie Moliterno, owner of Cheeky Monkeys Two Day Nursery in Bedford and co-owner of Cheeky Monkeys Day Nursery in Borehamwood, has launched the Parliamentary petition, supported by National Day Nurseries Association (NDNA) and Federation of Small Businesses (FSB).

Research by NDNA reports that the average nursery in England pays £21,000 per year in business rates. For many, the bills are much higher, especially in London and other large cities. The revaluation exercise in 2022 increased bills by an average of 40% for nurseries in April 2023.

Early years providers in Wales and Scotland have been exempt  from paying business rates for a number of years because their governments recognise the social good that they do, their financial pressures and the government-funded places they deliver.

NDNA’s Chief Executive Purnima Tanuku said: “With the Government-funded childcare expansion ongoing, early education and care providers are working extremely hard to meet local demand. The Institute for Fiscal Studies estimates that the Government will soon be paying for 80% of hours in nurseries. However, providers’ budgets are stretched, they are making an average loss on three and four-year-old places of £2.36 per hour per child.

“Exempting them from paying business rates – which school settings do not have to pay – would really help towards their overall sustainability. We need a thriving early years sector to fulfil the Government’s ambitious expansion plans, not a shrinking one.

“Early years settings should not be penalised for having space for children to play, grow, explore and develop. The Valuation Office Agency has been changing the way they calculate business rates – rather than on space, it is sometimes being done on the number of children that nurseries can support, amounting to as much as £500 per child.”

She added: “This is an unnecessary burden on childcare providers which they have to pass onto parents. If the Government is serious about supporting parents with their childcare bills, they need to remove this tax and support the early years sector so they can get on with the job of educating our youngest children and helping them reach their full potential.”

During the Covid pandemic in 2020-21, nurseries were given 100% rates relief, followed by a 66% reduction the following year due to the essential nature of their business. An NDNA survey found that if they did not have to pay business rates, 61% of nurseries say they would be able to pay their staff more; 50% would reduce business losses and 41% would reduce their fee increases to parents.

*The petition was formally approved on 15th April and is now live here – https://petition.parliament.uk/petitions/660129/. It will run for six months. If it attracts 10,000 signatures the Government will be required to review it and respond. If it exceeds 100,000 signatories, it will be eligible for a formal debate in Parliament.



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