Expenses and benefits: parking spaces

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1. Overview

As an employer providing parking spaces for your employees, you have certain National Insurance and reporting obligations.

What’s included

This covers parking spaces for vehicles including cars, motorcycles and bicycles.

These spaces may be at or near your employee’s workplace, or spaces used while on a business journey.

A business journey is either:

  • part of your employee’s duties, eg a service engineer travelling to an appointment
  • a journey your employee has to make to get to a temporary workplace

There are different rules if you cover the costs of employees’ parking, rather than providing parking spaces yourself.

2. What's exempt

You don’t have to report or pay anything to HM Revenue and Customs (HMRC) if you provide parking spaces at or near your employee’s workplace.

You don’t have to pay tax or National Insurance on parking spaces provided for business journeys, but you may still have to report these expenses to HMRC.

Salary sacrifice arrangements

You do have to report the employees’ parking spaces costs if they are a part of a salary sacrifice arrangement.

3. What to report and pay

If the parking spaces you provide aren’t exempt, you may have to report them to HM Revenue and Customs (HMRC), and you may have to pay National Insurance on the cost.

Spaces you provide for use on business journeys

If you provide parking spaces for business journeys, you can get exemptions (which have replaced dispensations). This means you won’t have to include them in your end-of-year reports.

If you don’t have an exemption, you must report the cost to you of providing the parking space on form P11D.

You don’t have to pay tax or National Insurance on these parking spaces.

Other parking spaces you provide

This covers parking spaces you provide that aren’t either:

  • at or near the employee’s workplace
  • for use on a business journey

You must:

Salary sacrifice arrangements

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

These rules don’t apply to arrangements made before 6 April 2017 - check when the rules will change.

4. Technical guidance

The following guides contain more detailed information: