Scottish Parliament issues Workplace Parking Levy Survey - respond before 20 May
By Justine Riccomini, Head of Taxation (Scottish Taxes, Employment & ICAS Tax Community)
28 April 2021
An opportunity exists to contribute to a short online survey on a workplace parking levy which closes on 20 May 2019. Justine Riccomini explains what is happening.
Background
Proposed amendments to the Transport (Scotland) Bill have been introduced by John Finnie MSP which would give Local Authorities the discretion to introduce a Workplace Parking Levy. Currently, legislation is in place in England and Wales which facilitates this discretion. Research carried out by a collaboration of Nottingham City Council and Loughborough University has now been published which contains the outcomes for Nottingham. It is being used as a template for Scotland by the Scottish Government.
What is the Workplace Parking Levy?
The current proposal is that Local Authorities could either work alone or with other authorities to impose a levy annually on employers who provide their staff with on-site parking free of charge. As any workplace levy would be discretionary, it would be up to each Local Authority to decide whether it wished to impose the charge.
How would the charge be levied and collected?
Employers would apply for a licence to allow employees to park in an employer-provided car park. A charge per qualifying space would apply. Nationwide exemptions are proposed for hospices, NHS properties, GP surgeries and disabled spaces.
The Local Authority would be able to decide on which employers to assess the charge (for example, in Nottingham, it was decided that employers with ten or less parking spaces would be exempted), which days could be exempted, and whether to base the levy on certain types of car (e.g. electric cars may not be charged at all or have a reduced charge).
What would the likely cost be?
The cost of the licence is proposed to be based on the maximum number of parking spaces in a workplace car park, with a set charge for each parking space. From the research carried out in Nottingham, which is the only part of the UK thus far to have introduced such a workplace levy, the set charge per annum is £415 per parking space from 1 April 2019.
The charge is initially payable by the employer, but it would then be up to the employer to decide whether to pass that cost on to employees. The research findings indicate the behavioural change comes about when the employer passes the cost on – otherwise, there is no real incentive to stop driving to work, other than out of personal moral choice.
Is there a Benefit in Kind?
Where the employer applies for a licence and pays the workplace parking levy, the legislation at s.237 ITEPA 2003 specifically exempts this cost from a charge to tax on the employees under the benefits code. HMRC guidance on this can be found here.
The reasoning behind WPL
The research carried out has concluded that there are links between the introduction of WPL and a reduction in commuting by car. As such, the Scottish Government believes that the introduction of the WPL into Scotland has the potential to reduce emissions and congestion whilst simultaneously increasing good air quality and attracting inward investment.
The proposals also ring-fence the funds raised to ensure they are spent on strategic Local Authority transport matters.
How many people would potentially be affected if WPL was introduced in Edinburgh?
According to an article published by the Scottish Parliament Information Centre (SPICe), who used the outturn figures from the Nottingham research to formulate a projection, 9.4% of the 333,000 Edinburgh-based employees would be likely to have some form of parking charge passed on to them.
SPICe states: “The Scottish Parliament’s Rural Economy and Connectivity Committee is seeking views from the public to better understand what people think about the measure, as well as holding two evidence sessions on 22 and 29 May to consider how the levy might work in practice. The Committee’s online survey will run until 20 May.”
Further reading
Further information is available here (see Stage 2 for details of the actual amendments) and the survey can be found here. If you have any views on this which you wish to tell us about, please get in touch.