Staff parking tax criticised by business group

24 August 2010

Reports that councils may be considering the introduction of a levy on firms with private staff car parking spaces has provoked protest from a leading business group.

The workplace parking levy could see firms taxed on the spaces they provide their employees.

The scheme applies to firms with 11 or more parking spaces, with each space currently charged at £250 per year. That figure is set to rise to £350 over the next two years.

Employers can decide whether to shoulder the cost themselves or to pass it on to their members of staff.

The aim of the levy is to ease city centre traffic congestion and to encourage more workers to travel by public transport.

Last year, Nottingham city council was given permission to go ahead with the scheme and is due to introduce a pilot in 2012.

But press reports suggest that other councils may be examining the option as they seek to raise additional funds.

The Forum of Private Business (FPB) reacted by saying it is deeply opposed to the scheme.

Chris Gorman, the FPB's spokesman, said: "When the Nottingham WPL scheme was given the go-ahead last year, we said at the time that it would only be a matter of time before it spread to other towns and cities. Sadly, it appears those fears will soon be realised."

The FPB regards the levy as a stealth tax, which will have a disproportionate impact on small businesses.

Mr Gorman continued: "Businesses already contribute enormous amounts to public services through existing taxes such as business rates. Whatever its supposed justifications, the danger is that the WPL could open the floodgates to a raft of new taxes and charges being levied onto companies to pay for things which were previously paid for through general taxation.

"And while councils' finances are under pressure, this is a very short-sighted idea as companies are likely to avoid areas with a WPL scheme in operation, meaning jobs, investment and therefore tax revenue will end up elsewhere."

Mr Gorman added: "This proposal comes as small businesses are battling with economic uncertainty, public spending cuts and worrying levels of inflation.

"We would urge any businesses whose local authorities are considering implementing a WPL scheme to oppose it in every way they can."