Car parking

By Tolley in association with Philip Rutherford

The following Employment Tax guidance note by Tolley in association with Philip Rutherford provides comprehensive and up to date tax information covering:

  • Car parking
  • Introduction
  • Car parking facilities at or near to the employee’s workplace
  • Vouchers and non-cash tokens
  • Parking fines
  • Reporting requirements
  • Interaction with salary sacrifice arrangements


Car parking can be provided to employees in a number of ways. This guidance note examines each of the different methods in which an employer can provide this benefit.

Car parking facilities at or near to the employee’s workplace

Where an employer pays for or reimburses an employee for the costs associated with car parking at or near to the employee’s place of work, these amounts are subject to neither tax nor NIC and there are no reporting requirements associated with them.

This exemption is provided by ITEPA 2003, s 237. HMRC’s guidance is at EIM01030.

The exemption covers all vehicles, including bicycles and motorcycles.

At or near to

This terminology is not covered by a definition within the legislation and HMRC’s internal staff guidance allows for quite a flexible approach. As long as there is a reasonable rationale for the location of the car parking then there should be no tax, NIC or reporting requirements associated with it.

Simply because there is a closer car park to an employer’s place of business than the one chosen does not preclude the exemption. For example, an employer may have a city centre location and may have reserved spaces at a number of car parks. The employer may also choose some car parks which are slightly farther from the office as a more economical way to provide the benefit. HMRC officers are advised to allow a reasonable distance in the guidance at EIM21685.

HMRC is likely to see

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