Car park VAT battle rages on

Councils are set to return to the High Court for the culmination of their
£130m VAT battle with
HM Revenue & Customs
over off-street parking.

The ECJ this week
suggested that the issue should be decided on an ‘activities’ basis rather than
a council-by-council basis.

Four councils ­ the Isle of Wight, Mid-Suffolk, South Tyneside Metropolitan
and West Berkshire ­ appealed to HMRC over the issue, saying they should not pay
VAT as they are public bodies.

HMRC argues that since they compete with private sector car parks, they
should pay VAT to avoid a distortion of competition.

Marc Welby of BDO Stoy
said: ‘It’ll impact much more… not so much just car parking, but on
other areas where the activities of the private trader are exempt, whereas a
public body does get a refund of VAT.

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