In what has been branded the “toddler tax”, HMRC confirmed earlier this month that a whole nursery class provided by a private school will be subject to 20 per cent VAT if children of compulsory school age attend. From January, the government will remove independent schools’ VAT exemption and business rates relief in a move Labour says will fund 6,500 new teachers for state schools.
Headteachers of smaller, specialist private schools have said they have little room in already-squeezed budgets to make cuts, leaving few alternatives but to hike fees by 20 per cent – leaving parents to foot the cost. Now, it has emerged that parents of children in nurseries also face an increase in fees by up to 20 per cent when the policy is implemented in the new year, drawing much criticism from independent school leaders.
With the plans set to go ahead in a couple of months, below we take a look at what the toddler tax is.
What is the ‘toddler tax’?
In documents published on 10 October, HMRC addressed the question of whether nurseries would be impacted by the VAT proposals. Referring to nursery classes provided by private schools, it stated: “Nursery classes made up wholly of children below compulsory school age remain exempt from VAT. “If the nursery contains children of compulsory school age who you receive a fee for, the whole of the class will be subject to VAT.”
A child is deemed to be of compulsory school age on whichever date out of 31 December, 31 March or 31 August falls closest after their fifth birthday.
Who might it affect?
Denne historien er fra October 30, 2024-utgaven av The Independent.
Start din 7-dagers gratis prøveperiode på Magzter GOLD for å få tilgang til tusenvis av utvalgte premiumhistorier og 9000+ magasiner og aviser.
Allerede abonnent ? Logg på
Denne historien er fra October 30, 2024-utgaven av The Independent.
Start din 7-dagers gratis prøveperiode på Magzter GOLD for å få tilgang til tusenvis av utvalgte premiumhistorier og 9000+ magasiner og aviser.
Allerede abonnent? Logg på
'Last thing I saw was that half of Syria was liberated'
Former Olympic swimmer Yusra Mardini speaks candidly to Jack Rathborn about her country's future after the dramatic removal of the dictator Bashar al-Assad earlier this month
The 30 medal sports legend you may not have heard of
A Paralympic veteran, Sarah Storey tells Luke Baker why we struggle to celebrate para-athletes doing incredible things
Haaland's spot-kick sums up limp and lifeless City
So, no Christmas miracle for the man christened Josep. Instead, his new normal continued.
Gakpo emerges as Reds' latest game-changing star
Liverpool are accustomed to singing about walking through the storm.
Labour won't kill the British pub - but some will still die
The institution is safe for the time being but Budget tax hikes will affect those that are already struggling
China greenlight 'world's biggest' hydro dam in Tibet.despite flooding concerns
China has approved the construction of the world's largest hydropower dam on the eastern rim of the Tibetan plateau despite protests over its ecological impact and concerns it could affect millions of people downstream in India and Bangladesh.
Asia marks 20 years since.tragic Boxing Day tsunami
One of world's worst natural disasters claimed 228.000 lives
Israel confirms attacks on Houthi targets in Yemen
Israel's military has confirmed that it struck multiple targets linked to the Iran-aligned Houthi movement in Yemen yesterday, including Sanaa International Airport and three ports along the western coast.
Syria's rebels planned years ahead for life after Assad
Hayat Tahrir al-Sham commanders talk to Bel Trew about the planning and military innovations that brought them victory
Moscow 'foiled' multiple Ukraine assassination plots
Russia has claimed it has foiled several Ukrainian plots to assassinate senior officers and their families using bombs disguised as power banks or document folders.
