The plan is part of a move by the Welsh Government to introduce a permanent small business rate relief scheme.
Under the scheme, details of which were announced today by the Welsh Government’s cabinet secretary for finance Mark Drakeford, the upper threshold for business rates relief for childcare settings will increase from £12,000 to £20,500.
The move is expected to benefit more than 100 nurseries across Wales. However, according to the National Day Nurseries Association (NDNA), more than four in ten private and voluntary childcare settings in Wales will still be subject to business rates.
Announcing details of the scheme, the Welsh cabinet secretary for finance said, ‘The Welsh Government has previously set out our intention to introduce a permanent small business rates relief scheme from 1 April 2018. This will provide certainty and security for small businesses in Wales, delivering a tax cut to help them drive long term economic growth.
‘In 2017-18, we are providing small businesses with more than £110 million of support in paying their rates bills. Our permanent scheme, which will be in place from 1 April 2018, will maintain this investment from the Welsh Government. In line with our tax principles, the new scheme will target the support more effectively towards the businesses that will benefit most, supporting jobs and growth and delivering wider benefits for our local communities.’
The move follows the decision by the Scottish Government to make all nurseries exempt from business rates from April 2018.
The NDNA welcomed the concession to nurseries in Wales, however maintained its argument that childcare providers should be given total exemption from business rates.
Chief executive Purnima Tanuku said, ‘We welcome this concession to nurseries as a step in the right direction. At a time when margins are squeezed with rising staffing costs and inflation running at over 3 per cent, any support given to the early years sector is positive.
‘NDNA Cymru has worked closely with the Welsh Government on this issue so it is heartening that they have listened to us and the sector and responded with a positive announcement.
‘However, our research suggests that more than four in ten private and voluntary nurseries will still be subject to business rates. The Welsh Government is expecting private and voluntary nurseries to deliver the Childcare Offer for Wales - 30 funded hours to three and four-year-olds, which is the most ambitious scheme of its kind in the UK. We would like to see further support made available to those nurseries that fall outside of this rates threshold.
‘NDNA has argued that the sector should be given total exemption from business rates which are particularly high for nurseries which tend to be on larger properties with plenty of space for children to play.
‘In Scotland, nurseries have been made a special case and will be exempt from business rates completely from April 2018. The Welsh Government is offering a similar deal to a significant number of its nursery businesses but there has been no positive move made at all for nurseries in England.
‘We hope that the Department for Education takes note of these developments and looks at how it in turn can support its struggling early years businesses which are delivering the lion’s share of funded hours at rates below the market cost.’