On or Off Street Parking.
spidersong | Tue, 23/09/2008 - 09:34
You're possibly opening a can o'worms here!
A Local Authority is deemed to be operating outside the scope of VAT where it carries out it's statutory duties in a way that does not result in a significant distortion of competition.
On Street car parking is managed by a Local Authority acting under powers confered in relation to management of the highways, traffic control etc by The Road Traffic Act and the Road Traffic Regulations Act. Since no one else can provide on street parking in the UK, the activity is therefore outside the scope of VAT and won't be recoverable even with a VAT number on.
Now the can of worms - Off street parking provided by Local Authorities is subject to significant ongoing litigation that has in the last few days resulted in an ECJ ruling. The Isle of Wight (and others) argue that their car
parks are not subject to competition, or even if subject to competition their provision would not significantly distort the market. The ECJ has now ruled on where you need to look for competition and what is meant by significant and so the high court will now review the case armed with this information. It'll be another couple of years before there's a definitive answer on the subject.
Some councils have now stopped declaring the VAT on parking to HMRC, although HMRC tend to be assessing these to ensure that they don't lose out if the judgement goes their way.
HMRC's point of view is still that Off street parking is Standard rate and are applying this despite having lost the earlier parts of the case, so if it's off street you can claim it back, if its on street there's no VAT to claim back.
Incidentally excess charges in either type of car park are outside the scope of VAT.