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?
Bu hikaye The Independent dergisinin October 30, 2024 sayısından alınmıştır.
Start your 7-day Magzter GOLD free trial to access thousands of curated premium stories, and 9,000+ magazines and newspapers.
Already a subscriber ? Giriş Yap
Bu hikaye The Independent dergisinin October 30, 2024 sayısından alınmıştır.
Start your 7-day Magzter GOLD free trial to access thousands of curated premium stories, and 9,000+ magazines and newspapers.
Already a subscriber? Giriş Yap
City squander three-goal lead as team self-destructs
At least it was not a sixth successive defeat.
ACCLAIMING NORA
As the reality of another four years of Trump begins to set in, Robert McCrum suggests Nora Ephron’s comforting world of witty prose and whirlwind romances can help us through
Disabled people are terrified of Starmer's welfare reforms
“People are just frightened. There is no sense that the state in Britain is going to support us if we get into trouble. In fact, it’s the opposite.
Trump will change his tune on tariffs once in power
According to Donald Trump, the most beautiful word in the dictionary” is tariff”.
We can't separate God from the assisted dying argument
As Friday’s Commons vote on assisted dying draws closer, the debate surrounding it, which has so far focused on issues about the terminally ill, pain, personal autonomy, the ethics of killing, and care, seems to have moved from respectful dialogue to becoming more fraught and personal.
Five rescued 24 hours after yacht capsized in Red Sea
Search continues for seven people, including two Britons
Pakistan authorities launch operation to clear Islamabad
Move follows clashes in the capital between police and supporters of Imran Khan which have left six people dead
World's oldest man dies at 112, 'surrounded by love'
John Tinniswood was born in 1912, the year the Titanic sank
UK troops to probe drones mystery at US airbases
Dozens of British soldiers have been drafted in to help the US find out who is responsible for flying more mystery drones over three air bases in England.
Will our rat-infested prisons forever be a low priority?
Appalling conditions in English and Welsh prisons have been caused by years of underfunding, mismanagement and neglect, according to Elisabeth Davies, the national chair of the Independent Monitoring Boards.
