Government should 'drop' parking tax law

A leading business group has petitioned the government to scrap legislation which allows local authorities to charge a tax on business car parking spaces.

Under the Transport Act 2000, local authorities have the power to introduce Workplace Parking Levy (WPL) schemes.

The Levy allows councils in England to tax businesses for providing employees with spaces to park at work.

At the moment, the Department of Transport is seeking feedback on how the Act may be implemented.

However, the Forum of Private Business (FPB) has responded to the consultation by calling on the government to abolish the legislation altogether, arguing that it is unfair and that it discriminates against small-business employers.

In its submission, the FPB claimed that the WPL would have a damaging and disproportionate effect on small firms, including those with more than 20 employees.

Phil Orford, the FPB’s chief executive, said: “The tax burden is already a major problem for small businesses which are struggling to survive the recession. The government should be working hard to support businesses and relieve this burden, not add to it.”

Mr Orford pointed out that some employees have no choice but to drive to work and that getting rid of parking is simply not an option for most small businesses.

He added: “WPL schemes would cost them thousands of pounds per year and local economies could be seriously hurt as a result.

“Often, local councils readily place short-term revenue-raising above facilitating real economic growth. This stealth tax on parking smacks of more of the same.”

To date, Nottingham City Council is the only local authority that has applied to introduce the WPL.

Were the tax charge to be introduced across the country, the FPB wants the government to honour its promise to mitigate the impact of WPL schemes on business, especially small businesses.

One way of softening the impact of the tax, the FPB argued, would be to align the definition of a small firm, as written in the Act, with the one already used by both the UK and European Union (EU) as a business with fewer than 50 employees and a turnover of less than 10 million euros.