Expenses and benefits: car parking charges

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1. Overview

As an employer covering the cost of parking charges for your employees, you have certain tax, National Insurance and reporting obligations.

There are different rules if you provide your employee with a parking space directly.

2. What's exempt

You do not have to report anything to HMRC, or deduct or pay tax and National Insurance, if the charge was for parking at or near your workplace.

Business journeys

You do not need to report anything to HMRC, or deduct or pay tax or National Insurance, for parking charges on ‘business journeys’.

A business journey is either:

  • made as part of work - like a service engineer travelling to an appointment
  • to a temporary workplace

3. What to report and pay

If the parking charge is not exempt, you must report it to HMRC. You may have to deduct and pay tax and National Insurance on it.

Contracts with parking providers

If you have a contract with a parking provider and you pay them directly, you’ll need to:

If your employee has a contract with a parking provider and you pay them directly, you’ll need to:

  • report on form P11D
  • add what you pay for parking to their other earnings, and deduct and pay Class 1 National Insurance (but not PAYE tax)

Parking charges as earnings

If you give your employee money to pay for parking charges, it counts as earnings and you must:

  • add it to your employee’s other earnings
  • deduct and pay PAYE tax and Class 1 National Insurance using payroll

Salary sacrifice arrangements

If the cost of the parking charges is less than the amount of salary given up, report the salary amount instead.

These rules do not apply to arrangements made before 6 April 2017 - check when the rules will change.

4. Technical guidance

The following guides contain more detailed information: