Parking spaces

Our team of experts tell you how to report to HMRC any parking spaces you provide for staff

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 is included under parking spaces?

If you provide parking spaces for your employees, you might be expected to report this benefit to HMRC and as a result there might be additional National Insurance to pay.

As far as HMRC is concerned, these parking spaces include parking spaces which you provide for your employees’ vehicles, including cars, motorbikes as well as bicycles. The spaces may be at or near your workplace but they may also be parking spaces which are provided while on a business journey. When HMRC refer to “at or near” the workplace, they haven’t set any rigid rules about what distances are covered by that definition and simply say that the parking should be within a reasonable distance. The car park doesn’t need to be the nearest to the place of work either.

For HMRC’s purposes, a business journey is one that is undertaken as part of your employee’s day to day job or one to a temporary workplace. If your employee is a healthcare worker who visit patients as part of their job, this would be classed as a business journey. A temporary workplace is one that your employee is expected to work at on a temporary basis (which is less than 24 months).

These rules only cover parking spaces which you provide yourself as an employer. If you are picking up the costs of your employees’ parking, these are covered in our guide ‘car parking charges’.

Are there any exemptions?

If the parking places you provide are at or near your employee’s workplace, you don’t need to report anything to HMRC and there wouldn’t be any additional tax or National Insurance to pay. You wouldn’t have to pay any additional tax or National Insurance on parking charges arising from business journeys although you would need to report the expenses to HMRC.

If these parking costs form part of a salary sacrifice arrangement, you do need to report them to HMRC.

How do you report to HMRC and pay?

For any parking places you provide which aren’t covered by an exemption, you will need to report them to HMRC and there may be additional National Insurance to pay.

If the costs relate to spaces you provide for use on business journeys, you might be covered by an exemption in which case they won’t need to be reported to HMRC or included in any end-of-year reporting. If they aren’t covered by an exemption, you need to report the cost to you on your P11D form but you won’t pay any additional tax or National Insurance on these parking spaces.

If you cover the cost of any other parking spaces and these aren’t at or near your employee’s place of work or for use on a business journey, you need to report the cost of them to HMRC on your P11D form and pay Class 1A National Insurance on the cost to you of providing the parking space for your employee.

If these costs form part of a salary sacrifice agreement and the amount of salary given up is greater than the cost of providing the parking space, you need to report the salary amount to HMRC instead. This only applies to salary sacrifice arrangements made after 6th April 2017.

How can DSR Tax Claims help?

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.

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