Overpaid parking fees are consideration for a taxable supply

The council operated pay and display off-street car parking. A dispute arose over the VAT treatment of an overpayment for parking for example where an hour’s car parking cost 90 pence but the vehicle owner only had a pound coin so voluntarily overpaid ten pence knowing the machine did not give change. In an earlier appeal by the same council on the same matter in 2012 (TC2342) the First-tier Tribunal accepted the council’s claim. HMRC did not appeal.

However a few years later the Court of Appeal on in National Car Parks Ltd v CRC [2019] STC 1126 confirmed HMRC’s view that overpayments for off-street car parking voluntarily made by vehicle owners were subject to VAT.

The taxpayer subsequently argued that its case was ‘distinguishable from NCP’ because it was a public authority. It submitted a voluntary disclosure for overpaid output tax of £4 519 which...