Nursery Relief

At the Budget on 3 March 2021, the Chancellor announced that the Nursery Discount would continue to apply at 100% for eligible properties for the first three months of 2021 from 1 April 2021 to 30 June 2021. Subsequently, from 1 July 2021 to 31 March 2022, the Nursery Discount will apply at 66%. From 1 July 2021, the relief will be capped at £105,000 per business.


How will the relief be provided?

Properties that will benefit from the relief will be hereditaments which are occupied by providers on Ofsted’s Early Years Register and which are wholly or mainly used for the provision of the Early Years Foundation Stage.

To qualify for the relief the hereditament should be wholly or mainly being used for the above qualifying purpose. In a similar way to other reliefs (such as charity relief), this is a test on use rather than occupation. Therefore, hereditaments which are occupied but not wholly or mainly used for the qualifying purpose will not qualify for the relief. For the avoidance of doubt, hereditaments which have closed temporarily due to the government’s advice on COVID-19 should be treated as occupied for the purposes of this relief.

A ratepayer may refuse the Nursery Discount anytime up to 30 April 2022. The ratepayer cannot subsequently withdraw their refusal for all or part of the financial year. The Council can confirm that, for the purposes of section 47 of the 1988 Act, hereditaments where the ratepayer has refused the relief are outside of the scheme and outside of the decision of which hereditaments qualify for the discount and are therefore ineligible for the relief.


How much relief will be available?

Subject to the cash cap, the total amount of government-funded relief available for each property for 2021/22 under this scheme is:

  1. For chargeable days from 1 April 2021 to 30 June 2021: 100% of the chargeable amount; and
  2. For chargeable days from 1 July 2021 to 31 March 2022: 66% of the chargeable amount.

Subject to the cash cap, the eligibility for the relief and the relief itself will be assessed and calculated daily.

This should be calculated ignoring any prior year adjustments in liabilities which fall to be liable on the day.

Ratepayers that occupy more than one property will be entitled to relief for each of their eligible properties subject to the cash caps explained below.


The cash cap

No cash cap will apply for the period between 1 April 2021 and 30 June 2021.

From 1 July 2021, a person may only receive Nursery Discount relief of up to £105,000 in 2021/22, ignoring any relief for the period before 1 July 2021.

No person can in any circumstance exceed the £105,000 cash cap across all of their hereditaments.


Where a person has a qualifying connection with another person then those persons should be treated as one person for the purposes of the cash cap. Persons shall be treated as having a qualifying connection where:

  1. Both persons are companies, and
  2. one is a subsidiary of the other, or
  3. both are subsidiaries of the same company; or
  4. where only one person is a company, the other person (the “second person”) has such an interest in that company as would, if the second person were a company, result in its being the holding company of the other.

In cases where it is clear to the Council that the ratepayer is likely to breach the cash cap, the Council will withhold the discount. Otherwise, the Council may include the discount in bills and ask the ratepayer, on a self-assessment basis, to inform the authority if they are in breach of the cash cap.