Firms missing out on substantial tax reclaims from parking
RingGo, which provides cashless parking services, has highlighted how, unlike kerbside parking, all parking within private and off-street council-run car parks is subject to VAT. This means that 20% of off-street parking costs, for business purposes, can be potentially reclaimed by VAT-registered organisations.
Few employees take the time to differentiate between these types of parking though, according to Mark Grudgings, product specialist for RingGo.
'When you're filling in your expenses, it's expecting a lot to remember if the parking was off-street or on-street and had VAT payable on it, even if you do know the difference,' he said. 'All too often, people just don't bother and put in a lump sum. But with parking fees costing several pounds a time, the tax refund that businesses miss out on can be substantial.'
He continued: 'It's one reason why we set up our RingGo Corporate service. The service acts like a fuel card for employees, but in this case, it's parking that's involved, not petrol. When employees travel on business, they just park in one of the 250,000 RingGo-enabled parking spaces and use the Corporate service to pay.'
Business benefits include a clear and comprehensive consolidated invoice at the end of each month, which automatically splits out the off-street and on-street parking charges. On the invoice, each and every scrap of VAT is aggregated and presented as a single overall figure in a form that is HMRC compliant, making it easy to claim back the tax.