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VAT cut little help to nurseries

1 min read Early Years
The cut in VAT announced by the Chancellor yesterday (24 November) will only lead to small savings for nurseries, says the National Day Nurseries Association (NDNA).

Alistair Darling used the pre-budget report to cut VAT from 17.5 per cent to 15 per cent to help kick-start the economy.

But the NDNA said that as up to 80 per cent of costs for day nurseries are salaries, the move will only lead to small savings on things like supplies, equipment and repairs.

Purnima Tanuku, chief executive of the NDNA, said: "We feel that further support is needed in the sector to help day nurseries in these challenging times."

But she added that some of the measures in the pre-budget report would help nurseries, most of which are small businesses.

"Nurseries in financial difficulties struggling to pay their tax bill will now have the option to spread the cost, and we would hope that this will help them with their cash flow. Nurseries will also be able to access funds through a new Small Business Finance Support Scheme and we are keen to find out more about this."

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