What is ‘toddler tax’ that could see some parents paying VAT on nursery fees?
The IndependentThe best of Voices delivered to your inbox every week - from controversial columns to expert analysis Sign up for our free weekly Voices newsletter for expert opinion and columns Sign up to our free weekly Voices newsletter SIGN UP I would like to be emailed about offers, events and updates from The Independent. 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. 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. Independent school leaders fear it is children with special educational needs and disabilities who might be affected by a “toddler tax”, as well as children who attend small nurseries or nurseries attached to schools that intentionally mix ages – causing “a wide range of harms”. Applying VAT to the fees of everyone in a class just because one child has reached school age appears very unfair and could have a detrimental effect on children who simply need more time before starting school to get the best start in life.” The charity said data suggests an estimate of more than 320 children wish to defer their school start date every year and so could be impacted by the policy.