Nurseries renew call to scrap business rates for childcare providers

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Nurseries are urging other owners and parents to get behind a new petition to scrap business rates for day nurseries, with the hope of getting the issue debated in Parliament.

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Victoria Whitty, manager of Hocus Pocus, started the new business rates petition

Hocus Pocus Day Nursery in Bolton started the petition on the UK Government and Parliament website.

Nursery World reported last year on a previous petition, which also called for an end to business rates for nurseries and VAT, set up by a different nursery owner, which gathered 5,853 signatures. It closed in March, because parliamentary petitions are only open for six months.

Since April, nurseries in Scotland have been exempt from paying business rates under a new scheme introduced by the Scottish government. Wales has also recently announced a small business rates relief scheme, but the Government has made no concessions for nurseries in England.

Hocus Pocus’ nursery manager Victoria Whitty, who posted the new petition, told Nursery World, ‘We had signed the previous petition and thought we’d try and get it out there again, and make a bit more noise. We’re bewildered it’s not got more signatures.’

As with the other petition, which was started by Sue Johnson who runs Scamps of Benson, it also calls for nurseries to be zero-rated for VAT.

Mia Kilburn, the owner of Hocus Pocus, who runs the nursery with her brother Ian, said, ‘I don’t understand why something that is going to affect so many people in the country only got 6,000 signatures.’

As an aside, she commented that a petition to get Irn Bru to change its recipe back to the original has so far gathered more than 52,000 signatures.

Ms Kilburn opened the nursery in 2003 and it is registered for 90 places.

The nursery’s business rates for 2018-19 are £12,271, up from £9,000 on the 2017-18 financial year, and Ms Kilburn said she anticipated that they would rise next year to around £15,000.

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Hocus Pocus nursery in Bolton

‘Our overheads are monumental,’ she said. ‘The money would go a long way to provide better facilities for the children. I don’t think the general public are aware of the repercussions. We’re tied by insurance premiums. We pay VAT on gas and electricity.

‘It’s a very unfair playing field. At least one council nursery in our area has closed - if the council can’t make it work, how can we? I have sleepless nights. I’m responsible for 25 staff.

‘£12,000 a year could be the difference between staying afloat and going out of business, or improving children’s experiences.’

Nursery owner Samantha Ashfield who runs Battenhall Nursery in Worcester is also backing the petition and contacted Nursery World to help publicise it.

‘For the petition to be discussed by Government we need to reach as many people as possible,’ she said.

If 10,000 people sign a petition on the Parliament website the Government issues a response, and at 100,000 signatures the petition is considered for a debate in Parliament.

Ms Ashfield set up Battenhall Nursery originally from home but moved out last year, after buying the house next door. 

As a result, the nursery, which was previously registered with Ofsted as childcare on domestic premises, has now been re-registered as childcare on non-domestic premises.

The change means that she is now paying business rates instead of council tax on the property, and she said she was ‘shocked’ to discover that the business rates were several times the council tax she had been paying on the property.

Ms Ashfield said, ‘We decided to expand, and my family and I moved out of our home. We converted the whole building into a nursery in December. The cost of my business rates is four times that of council tax and I have to pay refuse collection on top. When a business is trying to grow and provide childcare and employment, significant costs like this can have a huge impact on a business.’

Nurseries in Scotland now receive 100 per cent relief from business rates, a move that came into force from 1 April.

A Scottish government-commissioned report into non-domestic business rates said that the move would save the childcare sector in the country around £8m a year.

In Wales, following a consultation last year, the Welsh government has announced a similar deal, which the National Day Nurseries Association said would benefit a significant number of nurseries.

Purnima Tanuku, chief executive of the NDNA said, 'Extensive campaigning from NDNA and our members has already seen changes in Scotland and Wales meaning a huge difference for struggling childcare businesses.

'Nurseries offer a social and economic good in providing quality education and allowing parents to work.

'As well as nurseries struggling to stay open, fees are also rising for families that don’t qualify for free hours. We urge everyone in the sector to support this petition.'

Pressure on the Government to change the rules in England has been mounting. In a report published in April, the Federation of Small Businesses called on the Government to create and fully-fund a new 100 per cent business rate relief scheme for childcare providers in England, which would recognise the cost pressures on the sector.

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