2 April 2012
Introduction of first Workplace Parking Levy in Nottingham is a 'tax on work'
“A tax on work” is how the AA describes the introduction, by Nottingham City Council, of Britain’s first workplace parking charge scheme. Companies in the City of Nottingham will have to pay a fee of £288 for each parking space they offer their employees if they have more than 10 spaces. Some companies may pass on this charge to their employees.
When asked about this concept shortly after it was announced in August 2009, 76% of the AA Populus Panel of 18,964 members thought that workplace parking levy was a bad idea and that the government should stop it.
Although the scheme is intended to provide revenue to invest in local transport schemes and to act as an incentive to companies to encourage their employees to travel to and from work using other forms of transport, 84% of AA Populus Panel members looked upon the scheme as “simply another way of taxing people who work.”
Only 27% of the panellists saw their employers picking up the charge on their behalf, the remainder seeing the employer either trying to reclaim the cost through salaries, making the employee pay, or paying only some of the charge.
This damaging “tax on work” should be stopped from spreading elsewhere as it will damage the economy and hit employees who just can't afford it
Edmund King, AA president
Edmund King, AA president, said: “At a time when drivers are facing record prices at the pumps, further charges for parking at work are the last thing they need. This damaging “tax on work” should be stopped from spreading elsewhere as it will damage the economy and hit employees who just can't afford it.”
Nottingham’s work place parking levy scheme started on 1 April and it is thought that Bristol is interested in adopting similar measures. The AA strongly opposes workplace parking levies as a tax on jobs which damages local business and employees.
The Nottingham scheme was strongly opposed by local business (82%) and by nearly 55% of local people. Despite this the scheme went ahead.
The AA president has written to the Transport Secretary on this issue pointing out that:
The AA is concerned about the process of consultation for these schemes and whether the business case is legitimate. The Nottingham consultation was criticised at the examination in public for confused information regarding details of the scheme. The original proposals referred to a £185 charge per space per annum yet when the scheme comes into effect the charge will actually be £288.
We believe the Nottingham scheme will encounter problems as employers and employees realise the damaging financial burden such a scheme brings. In our polling 50% believed their employer would pay all or part of the charge but in the current economic climate this looks very unlikely.
As companies start to face huge penalties, because some have not properly registered, the scheme will increasingly be regarded as a tax on jobs and added bureaucracy. Local officials are already trawling company records to ascertain whether companies have any ownership links which means that collectively they have more than ten parking spaces, hence can be charged. Some employers are threatening to pull out of Nottingham and some employees have threatened to strike.
The AA is pleased that the coalition Government committed to review workplace parking levies under the recent Red Tape Challenge because of the impact they have on local economies. We are disappointed that further schemes may still come forward and would welcome further reassurance on how the government will ensure that any future scheme cannot progress until it has the full backing of local people and business.
King added: “Employers and employees already pay vehicle excise duty, fuel duty, company car tax and income tax. The Government is keen to say that ‘Britain is open for business” but these additional taxes on work suggest that Nottingham is not open for business.”
British Chambers of Commerce estimate that if such a scheme went UK wide it would cost business £3.4bn.
The Transport Secretary has replied to the AA that should schemes be presented to this Government for approval, we can rest assured that the issues of local business support and effective consultation will be key considerations in whether it would be granted approval.
(2 April 2012)
AA/Populus poll conducted between 15-22 December 2011