VAT treatment of parking facilities
Produced in partnership with Martin Scammell

The following Tax practice note produced in partnership with Martin Scammell provides comprehensive and up to date legal information covering:

  • VAT treatment of parking facilities
  • Why does this matter?
  • Scope of taxation
  • Meaning of vehicles
  • Grant of facilities
  • Facilities for parking
  • Designed for parking
  • Provided for parking
  • Parking or storage
  • Local authorities
  • More...

VAT treatment of parking facilities

This Practice Note is about the VAT treatment of parking facilities.

Why does this matter?

Charges for parking are normally subject to VAT, but this extends to leases and licences of entire car parks or blocks of garages, so that the sums involved may be substantial, and so that VAT needs to be recognised in sale and lease agreements. VAT can also sometimes be payable where parking is provided in conjunction with other accommodation, including residential property, and so the points are relevant in connection with plot sales.

If the seller or landlord has opted to tax, the transaction will normally be standard-rated anyway, but the taxation of parking will override the exceptions to the option. See Practice Notes: Option to tax—disapplication under anti-avoidance rules and Option to tax—disapplication for residential and other property.

Scope of taxation

The legislation excludes from the property exemption, and so taxes ‘the grant of facilities for parking a vehicle’. This implements a European provision which requires the taxation of ‘the letting of premises and sites for the parking of vehicles.’

Meaning of vehicles

Vehicles do not need to be motorised or capable of moving independently—the Tribunal has generally seen caravans as vehicles for these purposes and HMRC also says that trailers and bicycles are included.

The EU Court of Justice has also held that boats are vehicles, but in any case the

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