News added on 04.05.2017

LATEST NEWS

Penalties

Company drivers, parking fines and reclaiming VAT

Occasionally, your delivery drivers are bound to get caught for parking fines. Assuming you can’t get them overturned on appeal, can you reclaim any VAT that’s been charged?

In 2013 a Court of Appeal decision set out the following guidelines on when VAT should and shouldn’t be charged for parking fines.

Local authorities. Parking fines charged by local authorities aren’t liable to VAT. Even where a VAT registration number is shown on the parking penalty notice the fine will not include VAT and so there’s nothing to reclaim.

Private car parks. Car park operators, e.g. NCP, can charge VAT. It depends on how they describe charges they make.

  • if their terms and conditions say that overstaying is not permitted and a penalty is charged for doing so, the fine is not subject to VAT
  • if their terms and conditions say that if you overstay there will be extra charges for parking, even if it’s at a much higher than standard rate, VAT is payable and you can reclaim it.

Agencies that operate car parks for the owners usually set their own terms and conditions. This is typical where public organisations such as hospitals contract out their parking arrangements. The agencies monitor the parking and are responsible for issuing and collecting fines. Penalties charged in these circumstances are damages for breaking their terms and conditions. Because damages are outside the scope of VAT, they shouldn’t charge VAT. If they do you can ask them to remove it.

There’s no VAT added to local authority fines. The same is true for other organisations if you park in breach of their terms and conditions. If they charge it you can ask for it to be removed. However, if the charge is for extra parking charges for overstaying you can reclaim the VAT.

© Indicator - FL Memo Ltd • Telephone: (01233) 653500 • Fax: (01233) 647100 • customer.services@indicator-flm.co.uk • www.indicator-flm.co.uk
Calgarth House, 39-41 Bank Street, Ashford, Kent TN23 1DQ • VAT GB 726 598 394 • Registered in England • Company Registration No. 3599719