Equality in Business Rates for Pre-School Nurseries

Business Rates are supposed to be a Property Tax, however the evidence that we have collated shows that Rates Assessors have appeared to ignore this, for example Careshare who have a purpose built nursery in Dunfermline, registered for 89 spaces, are paying the equivalent of £811.80 per registered child place compare this to another Careshare nursery which is also purpose built located at Port Hamilton in Edinburgh in the heart of the Capital’s financial district which is registered for 90 spaces, who are only paying the equivalent of £550.00 per registered child place.

The above is exacerbated by the fact that Careshare in Edinburgh charges more per day than the Careshare in Dunfermline, which is understandable, however the affluent area of St Andrews which is the location of the purpose built Wonderyears Nursery registered for 127 spaces, also charges the same per day as Careshare in Edinburgh, but is charged less than half the amount of Business Rates per registered place. The property in St Andrews is particularly relevant as this property is currently up for sale for over a seven figure sum. If Business Rates are a property tax then the above 3 examples clearly show the current system does not work.

It would appear that the Rates Assessor has based their calculations on the rental information provided by the Tenants, however not all Tenants have provided this information and even when they have, the Rates Assessor does not have the manpower to check that the information supplied is correct.

In cases where no rental figure is provided, the assessor has to effectively guess what the rental figure should be, this has lead directly to a dramatic variance in Business Rates. For example the previously mentioned nursery located on the desirable waterfront at East Sands, St Andrews, is not only 80% bigger than the Building Blocks Nursery located in an Industrial Estate in Rosyth, but has a Rateable Value of £8,600.00 lower. In this case either a mistake has been made in the calculations to ascertain the Rateable Valuation of these two properties or incorrect information has been submitted by the businesses to the local rates assessors.

Companies who have invested in new property are being held at a distinct disadvantage when it comes to Business Rates. It appears that the policy of Rates Assessors is that nurseries operating from old converted houses pay 2/3rd and those operating from “portacabin”s pay 1/3rd of the business rates which a purpose built building pays.

This Policy will effectively put an end to the investment and development of new build nurseries, and will result in older stock properties being adapted, which will not always result in the best environment for children, as they will not have disabled or environmentally friendly features etc. Surely as a modern society we should be encouraging the development of high quality sustainable premises to help nurture future generations.

In summary Business Rates is a property tax, however the table below shows that is not the case as we have highlighted in the examples above. Six of the top ten Nurseries on the chart below are located in Dunfermline and the surrounding area, despite the fact that in a recent report from HBOS, Dunfermline along with Kettering in Northamptonshire has suffered the highest fall in property prices in the UK.