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  • VAT & Parking

    Recent years have seen significant changes to the way VAT impacts on the parking sector and further changes are likely. We provide specialist VAT advice to parking operators, landowners and suppliers who provide support services to the parking sector.

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    VAT Savings

    Although HMRC guidance on how VAT applies to the parking sector has been unclear and inconsistent, we have successfully obtained favourable rulings from HMRC on a number of issues. Depending on how a parking operator has treated their income streams and the commercial arrangements with landowners, there may be opportunities to obtain refunds of overpaid VAT from HMRC.

    VAT Structuring

    We also assist parking sector clients to structure contractual arrangements to maximise VAT efficiency. Although commercial requirements always take priority, there are a number of potential ways that arrangements can be structured to minimise the impact of VAT.

    VAT Recovery

    HMRC are currently seeking to restrict the right of parking operators to fully recover VAT on costs. HMRC’s attempt to restrict VAT recovery should not go unchallenged. We have experience of negotiating with HMRC on this matter and will also be close to proceedings as this matter ultimately works its way through the courts, as we expect it will. In the meantime, we can protect your position and minimise the impact of any action HMRC may seek to take.

    How we can help

    HMRC have wrestled with how VAT applies to the parking sector for many years, particularly how Parking Charge Notices (PCNs) should be treated, although there are many other areas of contention.

    Originally, HMRC only allowed local authorities to treat PCN revenue as being outside the scope of VAT, with PCNs issued on private land treated as being subject to VAT.  Then in 2007, HMRC accepted that private landowners could also benefit from VAT free PCNs, although this treatment was not extended to ‘3rd party’ parking businesses who operated and managed car parks under the authority of the landowner.

    The Vehicle Control Services Court of Appeal judgement in 2013 finally enabled 3rd party operators to benefit from VAT free PCNs, although HMRC have sought to narrow the scope of this judgement ever since then.

    However, we have applied not only the VCS judgment but also subsequent (contract law) caselaw to successfully argue that the scope for VAT free PCNs should be wider than HMRC had initially argued.

    If operators have paid VAT on PCNs, it is possible that a refund may be available and we have the industry knowhow and experience to submit and manage claims on behalf of parking operators.

    We are also well placed to handle HMRC challenges to VAT recovery (which HMRC see as a quid pro quo where PCNs are found to be VAT free).  It is likely that input VAT recovery is a matter that will be litigated further and we can also handle and manage appeals on behalf of parking operators if this is required.

    Contractual arrangements are central to many of the VAT issues and opportunities in the parking sector and we have years of experience reviewing and advising parking companies on contractual arrangements, identifying opportunities for VAT savings and managing potential VAT risks.

    Some of our specialists who can help

    Keith Miller

    Associate VAT Director

    Keith primarily specialises in advising on all aspects of VAT, but can also advise on other indirect taxes. Keith works closely w...

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    Please provide as much detail as possible in regards to the reason for your enquiry so our tax advisers can prepare and tailor their response to reflect your needs. We will endeavour to - respond / call you back - to discuss your enquiry and you will not be charged for this time.

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