VAT on Nursery Fees Sparks Debate Over Impact on Parents and Class Dynamics

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Starting in January, parents sending children to nurseries attached to private schools will be required to pay VAT if the nursery classes are not "wholly, or almost wholly" made up of children under the compulsory school age. This measure targets classes where 90% of children are expected to be under five to avoid VAT charges. Laura Trott, the Shadow Education Secretary, has criticized the move, accusing Labour of being “blinded by class warfare,” suggesting that the policy is unfairly targeting families who choose private nurseries, leading to higher costs for parents as nurseries absorb the added tax burden.

 

According to Trott, this tax change is likely to drive up nursery fees. “With a number of nurseries now set to face a higher tax bill, it is inevitable that parents will end up paying the price through higher fees,” she said. The concern centers on parents who could see increased nursery costs as a result, particularly for families with children born between April and August, as these children may wait up to five months before joining primary school, depending on their birthdate. For these families, the timing of school entry can affect whether they are subject to VAT or not.

 

Despite this opposition, the government maintains that most nursery classes will not be impacted. A government spokesperson clarified that "the vast majority of nursery classes will not be subject to VAT, as children have usually entered the first year of primary school by the time they are of compulsory school age.” This reassurance aims to quell concerns that nursery fees will rise widely. Additionally, standalone nurseries that are not attached to private schools remain exempt from VAT, no matter the age of their attendees.

 

However, there remains a broader debate over the policy's impact on families who choose to defer their child’s entry to primary school. A Treasury source emphasized that the decision to defer school entry, which some parents choose for summer-born children or for children with additional needs, is a personal choice made in the child’s best interest. The source argued that financial concerns should not pressure families into sending children to school earlier than they are ready. The spokesperson stated, “There are lots of reasons why a family may feel that deferring starting school is right for their child, from their age for summer-born children to those with additional needs or prolonged absences.”

 

Critics of the policy continue to express that families should be free to make decisions about their child’s education without the pressure of increased nursery costs. They argue that any policy change impacting early childhood should prioritize a child’s developmental readiness, not financial implications for parents or preschools. As the January implementation date approaches, the discussion remains a complex blend of education policy, class considerations, and family choice.

 

Based on a report by Sky News 2024-11-13

 

 

 

[mrfill]

And the debate goes- Children go to primary school at age 5 so do not require a nursery and will, therefore not be charged VAT.
However, private schools that try to avoid VAT by packing nursery classes with primary school pupils will be caught. Time for outrage....

[Chomper Higgot]

Plugging tax evasion.

[Mediappy]

This new VAT rule on nursery fees is definitely stirring the pot. Looks like parents with kids in private school nurseries are going to feel the pinch, especially if their kids hang out a little longer in nursery before starting school.

[Mediappy]

On 11/15/2024 at 8:07 AM, Mediappy said:

This new VAT rule on nursery fees is definitely stirring the pot. Looks like parents with kids in private school nurseries are going to feel the pinch, especially if their kids hang out a little longer in nursery before starting school.

For parents with summer-born kids, it could mean paying more just because their kid isn’t old enough to move up yet, which feels unfair.
If you’re dealing with VAT on stuff like this, you can check out this site: https://thevatconsultancy.com/services/vat-and-customs-duty-training/ . It can help break it down.

Edited November 20 by Mediappy