Parking provision and expenses

Produced by a Tolley Employment Tax expert

Employment Tax

Guidance

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

There is an exemption from tax and NIC where an employer provides parking, or pays for or reimburses an employee for the costs associated with car parking at or near the place of work; there are no reporting requirements. The exemption covers parking for all cars, vans, motorcycles and bicycles.

This exemption applies regardless of how the benefit is provided. Whether the employer provides a car park, reimburses costs, or provides a voucher or tokens for parking.

See Simon’s Taxes E4.715A and E8.1119. HMRC’s guidance is at EIM21685 and EIM01030.

Definition of ‘at or near’ the workplace

There is no legislative definition for what ‘at or near’ the workplace means. HMRC’s guidance at EIM21685 encourages a flexible approach as long as parking is within ‘a reasonable distance’.

Where an employer uses an external car park, there is no requirement for it to be the closest one to the workplace. The employer may also choose car parks using a number of factors including cost. The nearest one might

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