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.