What is ‘toddler tax’ that could see some parents paying VAT on nursery fees?

A whole nursery class will face paying 20 per cent VAT if just one child is five years old under government guidance recently issued about the controversial new policy - (PA Archive)

Parents could face paying VAT on nursery fees if a class contains just one child aged five, according to government guidance recently issued on the controversial new policy.

In what has been branded the “toddler tax”, HMRC confirmed earlier this month that a whole nursery class provided by a private school will be subject to 20 per cent VAT if children of compulsory school age attend.