Can I claim back VAT on car parking charges?

I was asked this recently and like a good VAT adviser answered with a non-commital: it depends.

The client explained that they had several employees who travelled to meetings and incurred costs of parking. Sometimes the vouchers the employee got when parking showed a VAT number and sometimes it didn’t. This was confusing and they wondered whether they could just write the VAT number on the vouchers they had which didn’t have a VAT number on.

No! That way lies problems.

Let me explain. Car parking falls into two categories:

1. On-street parking; and

2. Off-street parking.

On-street parking is operated by the Local Authority and is covered by statute. Because of this there is no VAT on on-street parking charges.

Off-street parking is probably liable to VAT. It depends on whether the organisation operating the car park is VAT registered. You will know this because the car park vouchers will show a VAT number, or you can get a VAT receipt for the parking charge from the attendant. It’s harder to get a VAT invoice from an attendant as more and more car parks rely on machines to deal with the money and tickets.

So the answer: it depends!

If the voucher has a VAT number on it you can claim back the VAT.

What if you’ve overstayed your welcome and incurred a penalty in an off-street car park?

This is harder to answer, but in most cases there will be no VAT on the penalty as it is compensation for loss of use of the parking space. Most car parks will operate on this basis. However, to be really sure of the right answer you’d have to get a copy of the terms and conditions of the car park…

Yeah! Right! who’s going to do that…

If you’re really lucky you can take a photo of the car park’s basic terms that might be on display near the entrance and read that when you have quiet five minutes. No? Well it was just a suggestion since most of us have a camera in our mobile phone. It’s probably safer to just accept that you don’t recover the VAT on parking penalties.

As most parking vouchers don’t show the VAT separately do you know how to work it out? I’ll post an article on how to do this soon.

If you’ve read this far, thank you. Please leave a comment or ask a question below.