Sian Lewis-Evans, owner of Gingerbread Day Nurseries in Stoke Hammond, Buckinghamshire, has published a petition on the 10 Downing Street website, which at the time of going to press had attracted 58 signatures.
Registered childcare settings are exempt from VAT, which means that they cannot charge it or claim it back on any goods or services that they purchase.
But maintained nurseries and schools are also exempt from VAT but are usually able to claim back the taxes paid on goods and services via their local authority, under section 33 of the 1994 VAT Act.
Ms Lewis-Evans told Nursery World, 'I am losing around £15,000 per year to VAT and my setting is only small. If we were able to reinvest this money into our setting it would benefit both children and staff, as we would be able to offer more training and purchase more resources.'
Catriona Savage, owner of the My First Friends Day Nursery and Pre-school, Birmingham, said, 'When I first bought this nursery I was amazed that nurseries are not able to claim back VAT. We have to pay VAT but as we don't charge it to parents, we can't claim it back. We are going to be squeezed again when VAT goes back up to 17.5 per cent, yet we are still expected to provide a good standard of service.'
Neil Leitch, director of communications at the Pre-School Learning Alliance, said, 'Becoming zero rated would allow nurseries and pre-schools to do considerably more with the revenue that they would otherwise be losing to VAT. I think I can speak for all of our members when I say that we would welcome it; the challenge is in getting HMRC to accommodate this request in such a difficult economic climate.'
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