Overpaid car parking fees

National Car Parks (NCP) operated pay-and-display car parks. In October 2014 it claimed a repayment of overpaid VAT of £488 669 relating to overpayments of car parking charges by customers. HMRC refused the claim on the ground that the overpayments represented consideration for the right to park.

The First-tier and Upper Tribunals dismissed the taxpayer’s appeal. This was on the ground that the taxable amount and consideration for VAT purposes was the total sum paid by the customer rather than the tariff advertised. 

Using an example of a customer paying £1.50 for an hour’s parking when the fee was £1.40 Lord Justice Newey in the Court of Appeal said English law ‘generally adopts an objective approach when deciding what has been agreed in a contractual context’. In this case the car park’s tariff board and statement that overpayments were accepted and no change given indicated that NCP would grant...