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Business Rates Change goes under the Radar...




The Early Years sector will be subject to another change, in the form of alterations in the way our business rates are calculated.


Previously, Business Rates (BR) were calculated using the net internal area (NIA) of a setting, with the NIA defined as the total usable area of each floor within a building, measured to the inside face of the boundary walls & excludes things like stairwells and columns[1].

However, from April 2023, our new BRs will be calculated by the Valuation Office Agency TO INCLUDE the following:


… permitted registered child spaces, as stipulated by Ofsted”[2]


For each child registered as part of our ‘maximum capacity’ with Ofsted, we will be charged a BR figure. From our initial research, this can be anywhere between £175 and £1,000 per child (please let us know if yours is more or less).


From our research, it appears the Valuations Office Agency have used Ofsted inspection report data to obtain the ‘Total number of places’ on which they’ve calculated the new BRs due to come into force 1st April 2023. However, initial findings show that it some cases, the most recent inspection reports have not been used. For example, we found BRs calculated using inspection reports dated January 2017, when there was in fact a new inspection dated September 2022.


It’s clear that the VOA don’t have a ‘one calculation fits all’, but it does essentially mean that the figure you have registered with Ofsted, as your maximum capacity, will likely be used in some way to calculate your new BR.


We are therefore advising all providers to:


  1. Check with Ofsted that your maximum capacity figures registered with them accurately reflect your ‘real terms’ occupancy. You can search for the data held by Ofsted using this link: https://reports.ofsted.gov.uk

  2. Contact Ofsted to request that your maximum capacity figure (total number of spaces) is changed to your new ‘real term’ figure with immediately effect.

  3. Check the VOA website to see what your new BR will be come 1st April 2023 - https://www.tax.service.gov.uk/business-rates-find/search

a. Once you’ve found your business, you can click to find your history of BRs and dates. Make sure you click on ‘FUTURE from 1 April 2023’ as this will provide you with further details including ‘Area m²/unitwhich is where your ‘total number of places’ will be reflected, alongside your BR per child.


If you believe your BR it too high, from here you can contact VOA by clicking on the tab ‘Help with future valuation’ and send an enquiry (if it’s before 1st April 2023) with evidence of your email to Ofsted.

If you haven’t already, it is worth signing up to obtain a Business Rates Valuation Account https://www.gov.uk/business-rates-valuation-account where you can report changes to your property & challenge the rateable value.


In the meantime, Early Years Equality have submitted a Freedom of Information request to the VOA requesting more information on:


1) List of all Valuation Scheme Reference numbers under the description 'Day Nurseries & Premises' and their associated base rates

2) Details on how these BRs under the 'Day Nurseries & Premises' description have been decided & subsequently fall under specific Valuation Scheme Reference numbers.

3) How many have experienced a rise in their BRs and on average, how much by (3 sterling)

4) How many have experience a fall in their BRs and on average, how much by (£ sterling)


Additionally, we have requested information on mainstream schools to see if they will be subjected to the same permitted registered child spaces, as stipulated by Ofsted’:


5) Their Valuation Scheme Reference numbers and corresponding BRs

6) % on how many have experienced a rise in their BRs

7) % on how many have experienced a fall in the BRs


We have also requested information on how businesses falling under the 'Day Nurseries & Premises' can dispute their new BRs along with any policies relating to how to dispute, and their Complaints policy.


We'll keep you all posted 👍🏻




[1] https://www.tax.service.gov.uk/business-rates-valuation/show-help#dialog-basisOfMeasurement [2] https://www.tax.service.gov.uk/business-rates-find/valuations/27044051000/schemes/644004?uarn=12431525000

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