Do you handle funded-hours accounting?

Yes. We separate funded and private income, work out your real cost per place and margin, and account for the local authority funding and its timing, so you can see and plan around the funded-to-private mix.

Can you deal with nursery VAT and partial exemption?

Yes. Childcare is VAT-exempt, so a nursery cannot reclaim input VAT on the childcare, and where you have other taxable income we handle the partial-exemption calculation to work out what VAT you can recover.

Do you run payroll for nursery staff?

Yes. We run the payroll for your team alongside the accounts and tax, so the whole financial picture, including staff costs against funded and private income, is handled by one firm.

A fixed fee agreed up front, scaled to the number of places and staff and whether VAT and management reporting are involved. Tell us about your setting and we will price the lot with a deadline.

Accountants for Nurseries

Written and reviewed by the Childcare Accountants editorial team. Last reviewed 29 July 2026.

We act for day nurseries: the accounts and tax, the payroll, and the two things that make a nursery's numbers unusual, funded hours and the childcare VAT exemption. The full financial picture, not just a year-end return.

Fixed fee, agreed before we begin, with nothing charged until you approve it.

What We Handle

The nursery's annual accounts and its company or sole-trader tax, the payroll for your staff, and the bookkeeping that separates funded and private income so you can see your real margin. We handle the VAT position, including partial exemption where you have taxable income alongside the exempt childcare.

Beyond the compliance, we build the management figures a nursery needs: cost per place, funded-to-private mix, and cash-flow timing around the local authority's funding schedule.

Where Nursery Finances Get Awkward

A nursery carries things a normal small business does not: a large slice of income at the council's funding rate rather than a set fee, VAT you cannot reclaim on your costs, and payroll for a team. Miss the margin maths on funded hours and a busy nursery can be full and still losing money.

Because this is the work here, those are not edge cases. We keep the funded and private sides visible, get the VAT and partial exemption right, and give you the numbers to price and plan on.

How It Runs

You give us the nursery's records, the funding statements and the payroll details, and we run the cycle: bookkeeping, payroll, VAT where it applies, and the year-end accounts and tax. Identity checks first. Most nurseries take the ongoing service so the management figures stay current, not just the compliance.

Where the books are behind, we get them straight first and then keep them current.

What It Costs

A fixed fee agreed before work starts, sized to the nursery: the number of places and staff, whether there is VAT and partial exemption, and how much management reporting you want. We tell you the all-in picture, not just a headline.

To get a price, tell us about your setting and we will come back with a fixed quote and a deadline.