Car parking overpayments (NCP) – Tribunal Decision

The Court of Appeal ruled on 16 June that car parking overpayments form part of the consideration for off-street car parking.  Although no action is needed now, the judgment might affect local authorities with car park overpayment claims based on the King’s Lynn decision.

In the case of NCP – [2017] UKUT 0247 (TCC) –  the Judges denied its appeal and ruled that all receipts, including overpayments, are consideration for the supply of parking.  In a direct challenge to HMRC’s current policy, the Judge said also that the decision in King’s Lynn was incorrect.

Then Judges considered the point that local authorities cannot charge more than the tariff for parking as the charges are set in parking regulations and charging more would be ultra vires.  However, they did not accept that:

“…the way in which the tariff of charges is set can determine the nature of the overpayment.”

This is perhaps the key part of the judgment that will need further thought and we will be discussing the matter with the lawyers we are working with on the overpayment claims.

To recap, following the King’s Lynn decision, HMRC had accepted that where overpayments for parking are made, and no additional time is allowed, the overpayments are outside the scope of VAT.

For some time, local authorities have been successfully making refund claims to HMRC for the overpaid VAT in historic income from the overpayments.  There is also ongoing litigation on overpayment claims that were included in the now-decided Isle of Wight off-street parking claims; claimants are arguing that as the overpayment claims were included in the Isle of Wight claims they can go back more than the normal four-year time limit.

We do not know yet whether NCP will appeal against the judgment; nor do we know how the judgment might affect the ongoing litigation, but we will provide updates as further information emerges.

If you have any questions please contact:

Nick Burrows

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Nick Burrows

Written by Nick Burrows

Nick has nearly 30 years of working with and supporting public sector bodies with VAT and indirect taxes, starting at HM Customs and Excise and then as in-house VAT Officer at Hampshire County Council. Since moving to advisory firms, Nick has had senior public sector VAT roles at RSM Tenon (now RSM), KPMG, and PSTAX (since 2014). He has led VAT advice nationally on a wide range of public sector issues and helped shape HMRC policy in several key areas.

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