The UK’s largest private car park operator, NCP, made almost £700,000 a year from drivers who did not have the correct change and were forced to overpay for parking.
HMRC took £488,669 in VAT from NCP for overpayments made by customers between June 2009 and December 2012. This was 20 per cent of a total £2.44 million of overpayments made to NCP in that period, which equates to around £681,000 a year.
NCP argued because the overpayments were not for specific services (which are liable for VAT), it should not have to pay the £488,669; but the High Court disagreed, with the judges ruling that the total sum paid by customers – including any overpayment – were fees paid for parking services.
Edmund King, president of the AA, commented: “The best way out of this VAT quandary would be to give motorists’ change and not overcharge them in the first place.”
He added: “Drivers who have wanted to give left-over parking time to another motorist but been prevented by measures to stop tickets being transferred, such as the recording of number plates, will have a wry smile on their face when they hear this court ruling.”
RAC spokesperson Pete Williams described being forced to overpay for parking as “a source of huge frustration for drivers”, adding that anyone who had been “fleeced” in this way would view NCP’s appeal with “utter contempt”.
He suggested that NCP should donate any revenue from overpayments to a good cause, such as a road safety charity, and always offer drivers at least two forms of payment – one of which being card – at all of its machines.
In 2016, NCP made an operating profit of £10.274 million and saw a turnover of £202.703 million.
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