Stop taxing children - this is the message from one nursery owner in Donside who announced they are closing one of their facilities and blaming rising business rates and costs.
Bridge Nurseries disclosed last week that it was closing one of its sites in Westhill on Lawsondale Avenue - which was established more than 20 years ago in 1995 - on June 30.
Last month, Holyrood Finance Secretary Derek Mackay announced a £44million relief package to soften the blow of rate increases for certain sectors across Scotland. Hotels, pubs, cafes and other businesses will not see bills rise more than 12.5 per cent when the rates come into effect in April. However, nurseries will not be afforded the same assistance.
Graham Mogford, director of Bridges Nurseries, believes nurseries should not be taxed.
He said: “Stop taxing children - that is the message I’m saying to everyone.
“If you stop the taxing you are going to get childcare for a lot cheaper.
“I think it is wrong to tax parents and children, it is the children who are the future.
“I’m happy to pay personal tax and commercial tax but exclude children from VAT and business rates and childcare will be cheaper.”
The 32 children from the Lawsondale nursery are being offered a place at the company’s other Westhill facility at Arnhall, which looks after 142 children currently. They also have a third nursery at Bridge of Don.
Graham explained from April 1 the taxable rate for the Lawsondale nursery would rise from £9,000 to £17,000 and Arnhall from £64,000 to £100,000, dropped down from £112,000. Companies pays a proportion of the taxable business rate and this is worked out on the size of a business.
The director said the current rateable value per child at Arnhall is £447.55, which works out at a £219.30 share per child. With the new proposed business rates of £100,000 the ratable value per child is £699.30 with a share of £363.63, an increase of 56.25 per cent. The proposed rise means each child’s place will carry an extra £144.33p above the £219.30 already paid.
Graham told us the decision was made to close the Lawsondale site as it is the smallest of the three nurseries and wasn’t financially viable to keep running it.
He said: “It has been a difficult decision to make but we have to ensure our future.
“We will still be delivering the same level of service but differently in one building.
The parents who made the choice to go to a smaller nursery will no longer have that.
“I think we will see more smaller nurseries disappearing.”
He added Bridge Nurseries is putting its prices up by 4.5 per cent to balance the books, which he says parents have been understanding about.
Graham told us he feels if nurseries continue to be taxed for business rates and VAT more will close with council run ones being left, which he said are not always fit for purpose as many do not open at the time some parents needs, for example those who work early.
Bridge Nurseries is appealing the increase of its business rates.
Councillor Ron McKail has been aiding the nursery’s call top stop taxing children.
He said: “The Scottish Government need to consider taking the private nursery sector out of the taxation system.
“This would have the benefits of expanding provision and parents would find childcare costs more affordable.
“It would also help to meet the Government’s objective of ‘improving outcomes for children especially those who are more vulnerable or disadvantaged.
“Many parents depend on the additional hours provided by the private nursery sector to allow them to work or to follow a course of study.
“Increased nursery fees would make places unaffordable for some parents.”
Aberdeenshire West MSP Alexander Burnett raised the concerns of private nurseries at First Minister’s Questions, but explained Nicola Sturgeon said the local council should pick up the tab.
He said: “This is exactly what business owners and local politicians have been warning about for months now, and I hope that others will not follow. Businesses in sectors that were not covered by the Scottish Government relief package will feel that they have been abandoned.”
A Scottish Government spokesman said: “The Government has committed around £660 million of business rates relief next year, including an additional £7.5 million relief recently announced for Aberdeen, while councils are empowered to apply further reductions to address any local issues as they see fit. Any business that is concerned about its valuation should contact the assessor and discuss how they worked out the provisional value. Companies have until September to appeal and we would encourage firms to take up those opportunities.”