National Car Parks Limited (NCP) have lost their case at the Court of Appeal (CoA) on a case that is familiar to many motorists.  The question to be decided; what was the taxable value of parking at a car park where the user doesn’t have the correct change and the machine does not provide change.  NCP had held that voluntary overpayments were just that, voluntary and therefore were not taxable.  HMRC had held that VAT was due on the total amount received for the provision of the parking service.  Both of the lower tribunals had found in HMRC’s favour.

The CoA considered the contract that was in place between NCP and a user of one of its car parks.  The tariff board displayed the terms of the contract for parking at the facility and a statement on the machine stated that “overpayments are accepted”.  The CoA found that the contract was only agreed by the user when they pressed the green button on the machine and at that point they accepted the terms of the contract, being that any overpayment they had made would not be refunded by the parking machine.  The contract price was therefore the amount of coins put in and not the prices as per the tariff board as a the contract was only agreed by pressing the green button.

NCP had sought assistance from a European case where money earned by buskers was held not to be taxable for VAT purposes as the funds were voluntarily given and therefore were not in exchange for goods or services and could not be thought of as “consideration”, using the statutory language.  The CoA’s judgement was not in conflict with that European judgement on busking as the terms of the parking contract were not agreed until the green button was pressed and this was after the overpayment had been made with the knowledge that it would not be refunded meant the overpayment was not voluntary but contractual.

The decision can be found at: National Car Parks Ltd v Revenue And Customs – Find case law (nationalarchives.gov.uk)

Please contact us if you have any question on VAT matters.  Determining what is taxable and what isn’t taxable can be a complex matter and we can assist.  We can also assist with claims against HMRC where you think you may have overpaid VAT.