One nursery owner said they had been charged £100k in VAT while expanding their site to meet growing demand
could be under threat as nursery operators are “disincentivised” from expanding due to “shocking” VAT rules.
He described the taxation as “shocking” and a “real kick in the teeth” as other businesses, such as property developers and private schools, are not subject to the same tax rules. the Government’s plan to offer 30 hours of free childcare to working parents of children aged nine months to five years by 2025There have been growing concerns about the feasibility of the expansion, with many in the sector warning that staffing shortages and underfunding meant many nurseries would struggle to offer the extra tax-payer-funded hours without raising fees.
In their recommendation, the MPs argued that this should be done “in recognition of their role in delivering a key government policy” and that this change, alongside scrapping business rates for nurseries, “could lead to nursery staff being paid more”.
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