Hospitals to get cheaper parking after winning HMRC VAT battle

Richard Aucock, Contributor
Wed, 20 Mar 2024

Parking for staff, patients and visitors at NHS trusts is now exempt from 20% VAT after years of court battles culminated in a landmark ruling.

VAT claims worth about £70 million could now be paid back to trusts, reports The Times.

Drivers who use NHS car parks could also be set to save millions of pounds a year after HMRC lost its VAT battle with the NHS.

However, the decision will only apply to car parks managed by the NHS. Those managed at hospitals by third-party companies will not be exempt from VAT.

In defending the charges, HMRC argued that if it did not charge VAT on parking, it would be unfair to such rival car parks, but the courts rejected this argument.

Judges said that NHS bodies operate under a ‘special legal regime’ providing medical care and therefore should be exempt from VAT.  

The legal proceedings began back in 2017, explains the Times, when Northumbria Healthcare NHS Foundation Trust took HMRC to court.

It argued it should not have to apply 20% VAT on parking charges for staff, patients and visitors who do not apply for free parking, such as disabled people or visitors with relatives who are gravely ill.

HMRC won the original case, but earlier this year the Court of Appeal overturned the decision of two lower courts.

The Times says around 50 similar court cases involving NHS trusts were paused pending this decision, which now sets a precedent.  

Last year, hospitals made £146 million from patient and visitor car parking, according to figures from the Liberal Democrats. This was up 50% in just one year.

Ask HJ

I received a parking fine for not displaying blue badge - can I appeal?

I parked in a disabled space and forgot to display my badge (I had my mum with me who has cancer and wasn’t well) I received a fine a week later and immediately appealed. The fine should have been on hold until the outcome and then said I could still pay the £60 reduced fee if unsuccessful. I’m still in their time frame for a response. However I received a debt collector letter demanding £170. No matter how many times I’ve told them I’m in appeal and sent evidence, they keep saying I was out of time to appeal (I wasn’t). This has stressed me so much I have paid the initial £60 but I'm worried the debt company will still not accept this. I’ve written to them and the parking company and Tesco where I parked, is there anything else I can do as they have not followed their own terms?

You can read our guide to appealing parking fines here: https://www.honestjohn.co.uk/advice/parking-ticket-appeals/ but we would suggest concentrating your efforts on the parking company as the debt agency will be acting on their behalf. You also have the option to escalate this to a trade body if the parking company is a member, or to Popla or the Independent Appeals Service if they are not a member. The crucial element is providing evidence that you submitted your appeal within the given timeframe, so be sure to include this in any communications.

Answered by David Ross

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