Employees car parking

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TinaW
TinaW Registered Posts: 5 New contributor 🐸
in General accounting discussion
I wonder if anyone can help. We are looking at alternate car parking at work and an option has come up.

We can get contract parking from the local council, the company will be invoiced including VAT. Can we claim the VAT back and take the net out of the employees wages? (with their permission of course)

This will be availble to all employees but some employees do not drive so they do not require it.

Can we do this and will it effect a P11d

Thanks

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  • Monsoon
    Monsoon Registered Posts: 4,071 Beyond epic contributor 🧙‍♂️
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    http://www.hmrc.gov.uk/guidance/480.pdf

    http://www.accountingweb.co.uk/anyanswers/car-parking-taxable-benefit

    There is no taxable benefit for the provision of a work parking space.

    Yes, the company can reclaim the VAT (though I haven't double checked this but don't see why not.

    I'm not sure if the BIK-free status changes if they pay for it.
  • payrollpro
    payrollpro Registered Posts: 427 Dedicated contributor 🦉
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    Actually i would go a bit further than this. Parking provided at or near the place of work is tax exempt and as far as I can see there are no restrictions as to how this is provided.

    Rather than just take the deductions why not use Salary Sacrifice? Get each one who is interested to agree to reducing their salary by the gross amount of the annual ticket and this saves tax and NIC, the company buys the season ticket and gives it to the employee, company saves ers NIC and claims back the VAT, if applicable because you need to check the VAT rules on council provided car parking, so a win. win all round. it coes not affect those who don't want it because their salaries remain at the higher level and no P11D because it is tax exempt.

    Have a think about it.

    Payrollpro

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