The NDNA said its research shows that once the new rates revaluations start next month, the average nursery will pay new business rates of £21,034 a year, up from the average bill this financial year of £13,267.
Many nurseries face bills from April of between £30,000 and £50,000, and some are as high as £150,000, according to a poll carried out last week ahead of tomorrow's budget.
Unlike schools, private nurseries in England are required to pay full business rates. However, in Wales and Scotland, all childcare providers are exempt from paying business rates.
The NDNA has highlighted that around 70 per cent of childcare places in England are taken up in private, voluntary and independent (PVI) nurseries. That figure is higher for children under two.
Voluntary and charity-run nurseries receive a discount of 80 per cent, but this remains a financial burden for them.
NDNA received responses from 274 nurseries, 118 from single-site settings and 189 from nurseries that are part of small groups or chains.
NDNA Business Rates Poll findings
- 59 per cent said their bill will rise for 2023/24 financial year
- 23 per cent said they did not know what their new bill will be
- 18 per cent said their bill had not risen
- The average business rates bill for 2023/24 is £21,034
- The average increase in their bill reported by respondents to this survey is 40 per cent
This year’s figure for the 2022/23 financial year is based on a poll carried out by the NDNA last November.
When surveyed 61 per cent of respondents said that if they didn’t have to pay business rates, they would increase pay for staff, while around half of respondents said their losses would be reduced, and 41 per cent said they would keep fee increases to parents lower.
During the Covid pandemic, nurseries were viewed by the Government as essential businesses and were made exempt from paying business rates for 2020/21, then given a 66 per cent discount in 2021/22.
Since then businesses in the hospitality, leisure and retail sectors have been granted a discount, but nurseries have ‘yet again’ been ignored, the NDNA said.
According to recent analysis by the NDNA there has been an 87 per cent increase in the rate of closures from April to December 2022, compared to the previous year.
NDNA chief executive Purnima Tanuku, said, ‘Nurseries should not be penalised for having enough space for children to grow, learn, explore and flourish. They are neither warehouses nor factories but are working hard to educate and support our next generation to reach their full potential.
‘We have been urging the Treasury and the Chancellor to take heed of our warning that many nurseries are on the brink of financial ruin and must be fully supported by removing unnecessary financial burdens.
‘Ultimately this shortfall is passed onto parents in higher fees or nurseries are forced to reduce the services they offer or to close for good.’
