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<p>VAT has been designed as a broad-based tax on consumption, and the twenty per cent
standard rate applies to most goods and services. Exceptions to the standard rate
have always been strictly limited by both legal and fiscal considerations.</p><p>
</p><p>Ofsted-registered nurseries and childcare providers are exempt from VAT. This
means they do not have to charge VAT to their customers, but it also means they cannot
recover the VAT they incur on the things they buy.</p><p> </p><p>We do not hold data
on irrecoverable VAT expenditure as businesses are not required to report this information
to HMRC in their VAT returns.</p><p> </p><p>While we keep all taxes under review there
are no plans to make changes to the VAT exemption which nurseries currently enjoy.
Representations on changes to the VAT system will be considered through the normal
fiscal event process.</p>
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