Our experts at DSR Tax Claims know how hard it is to find good, quality information about HMRC’s tax regulations that is easy to understand, and that’s why we have created these handy guides to tell you everything you need to know. Our aim is to make life easier for our clients and that is why we want to share our expertise with you. You can also call our friendly team on 0330 122 9972 – we’re the tax experts you can trust.
What counts as a car parking charge?
For the purposes of HMRC, when we talk about car parking charges we are referring to the cost to your employees for parking at or near their place of work as well as any parking charges they incur whilst on business journeys. HMRC would consider a business journey to be either a trip made as part of their work, for example a client visit or a healthcare assistant visiting a client, or a trip to a temporary workplace.
These rules don’t apply to parking spaces that are provided directly by the employer.
Are there any exemptions?
There is no need to report anything to HMRC or make any PAYE or National Insurance deductions if the parking charge related to parking at or near your workplace. However, if they form part of a salary sacrifice agreement then they would need to be reported to HMRC.
How do you report and pay car parking charges?
As with most things related to expenses and benefits, the way you report and pay depends on how the expense was incurred and how it was initially paid for. If the car parking charge isn’t classed as exempt it does need to be reported to HMRC.
The car parking charges should be reported and paid as follows:
- Parking charges on business journeys: these need to be reported on your P11D form but there is no need to make any PAYE or National Insurance deductions.
- Contracts with parking providers: if, as an employer, you have a contract with a parking provider and you pay them directly, you need to report this on your P11D form and pay Class 1A National Insurance on what you pay to the provider for parking charges. If your employee has the contract and you reimburse the employee for the parking charges directly, you still need to report this on your P11D form but this time you will add what you pay the employee for their parking to their other earnings and deduct Class 1 National Insurance appropriately. You won’t deduct any PAYE tax though.
- Parking charges as earnings: if you give your employee extra money in their earnings to cover their parking charges, this is automatically classed as earnings and needs to be added to their other earnings and PAYE and Class 1 National Insurance deducted through payroll as for their other earnings.
- Salary sacrifice arrangements: if these arrangements were made after 6th April 2017 and the cost of the parking charges is less than the salary given up, you need to report the salary amount instead.
How can DSR Tax Claims help?
We aim to make life as simple as possible for our clients and that includes giving you the information you need to make your taxes (and your life) simpler and less stressful. Our team of experts at DSR Tax Claims are always on hand to help our clients and our excellent standing with HMRC means that we can make sure you don’t fall foul of their regulations, while claiming your maximum tax relief. We can even take care of all that paperwork and deal with HMRC on your behalf too. Call our friendly team on 0330 122 9972 – we’re the tax experts you can trust.