One of NDNA’s campaign objectives is to make nurseries exempt from business rates.
Making business rates for nurseries exempt would save settings an average of £21,000 a year and would also benefit voluntary sector providers who are currently eligible for reliefs of 80% of their business rates bills.
NDNA renews call for business rates relief for nurseries in England
NDNA renews call for business rates relief for nurseries in England
Following an announcement in Parliament that pubs will receive a 15% cut to new business rates bills from April followed by a two-year real-terms freeze, NDNA has called on more support for nurseries.
Nurseries in England currently pay full business rates which can be refunded for school based settings. After the last revaluation in 2023, NDNA found that the average nursery has an annual bill of £21,034 per year.
NDNA are supporting the petition to abolish business rates for nurseries. Sign it here.
Tim McLachlan, Chief Executive of National Day Nurseries Association (NDNA) said: “Following the Treasury’s announcement in Parliament today to discount business rates for pubs by a further 15%, we call on the Chancellor to extend similar relief to nurseries. Efforts to help pubs should be followed by measures to support private and voluntary nurseries across England that are the bedrock of government-funded hours, supporting working families and the economy.
“Our latest research shows that the average nursery has to find £21,000 for business rates, an unfair tax that penalises nurseries with more space for children to grow, development and learn in. This is a crippling cost, especially when we know that 76% of our nurseries operate at a loss or only just break even.
“With the revaluation, we know that most bills will increase from April. We know of members whose rateable value has shot up by more than 40% and higher.
“There is no government funding to help nurseries meet this cost, whereas schools and academies which also run nurseries can claim it back. With the Government buying around 80% of all childcare hours, nurseries cannot pass this cost onto parents in the form of fees and we fear that many will be unable to continue their work.
“Nurseries in Wales and Scotland have been exempt from paying business rates for many years now as they are seen as a social good, delivering their governments’ early education ambitions.
“The IFS in its annual report on education spending evidenced a 22% drop in real terms of the childcare funding rate for three and four-year-olds because of spiralling costs. The Government must pay a fair hourly rate to providers and treat all types of provider the same by exempting all childcare settings from the scourge of business rates.”
NDNA believes that business rates are an unfair tax created for factories, shops, and warehouses and are based on space. This approach unfairly penalises nursery businesses, who have to offer good-sized rooms including outdoor areas for their children to play in, grow, explore and develop.
Nurseries end up paying more for the environment they provide children, and can be discouraged from investing or expanding by fear of higher rates.
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We have heard that due to revaluations and the end of some local authority discount schemes nursery business are facing big increases in business rates bills.
Nationally, we have taken this to the Chancellor and officials at the Treasury to request an urgent review. At the same time, there is a national petition on exempting nurseries that you can add your voice to.
To support you in raising this with your own MP, we have developed a template letter which you can use, adding your own information and business rates bill, to ask them to raise this issue with the Chancellor on your behalf as well.
Business rates for nurseries in England FAQs
NDNA is campaigning for nurseries to be exempt from business rates because the tax is based on property size rather than usage. This penalises nurseries with more space for children to grow, develop and learn in. NDNA argues that nurseries deliver essential social value and should be treated like those in Wales and Scotland, where nurseries are exempt.
Following the 2023 revaluation, NDNA found that the average nursery pays £21,034 per year in business rates. Some nurseries have seen their rateable values increase by more than 40%, putting significant pressure on already stretched budgets.
Most private and voluntary nurseries in England pay full business rates. Voluntary providers may receive up to 80% relief, while schools and academies can reclaim their business rates entirely. NDNA is calling for a national exemption to create fairness across the sector.
NDNA’s research shows that 76% of nurseries operate at a loss or just break even. With no government funding to help cover business rates, and with nurseries unable to pass rising costs onto parents, many settings face an unsustainable financial burden.
After the Treasury announced a 15% discount on business rates for pubs, followed by a two-year real-terms freeze, NDNA urged the Chancellor to extend similar support to nurseries.
Yes. Nurseries in Wales and Scotland have been exempt from business rates for many years because they are recognised as delivering vital early education and childcare support.
NDNA is actively lobbying the Chancellor and Treasury officials for an urgent review and national relief for nurseries. They are also supporting a national petition and encouraging providers to contact their MPs using NDNA’s template letter.
Nurseries can support the campaign by signing the national petition, using NDNA’s MP letter template to raise concerns locally, and sharing their business rates information with NDNA to strengthen sector-wide evidence.
Business rates were originally designed for factories, shops and warehouses, not early years settings. Because rates are calculated on space, nurseries are penalised for offering the larger, high-quality learning and play environments required to meet early years standards.
Increasing rateable values, the end of some local authority discount schemes and lack of government funding mean nurseries must absorb rising costs. NDNA warns that without significant change, many be unable to continue their work.