The Education Committee, chaired by Robin Walker (pictured) and made up of cross-party MPs, has written to the Chancellor of the Exchequer, Jeremy Hunt, urging him to consider a recommendation within its report to remove the requirement for early years settings to pay business rates and VAT on purchases.
The letter says, ‘Business rates were an important issue raised to us by early years settings and practitioners [during the Committee’s inquiry].
‘Many childcare businesses pointed out that the size of their premises was not of choice but of meeting regulatory standards required by Government and Ofsted guidelines. They therefore had to pay more in business rates not as a result of a commercial decision to expand but as a result of meeting the space standards set by public bodies.
‘We were also informed of the effect of VAT on PVI settings, with many expressing how VAT charges drive up costs, and called for reform. Worcestershire Independent Providers told us that VAT charges had prevented them from moving ahead with a planned property extension. Little Faces Childcare argued that full relief from VAT would allow providers to pass on savings to parents.
