Scots firms could face paying tax on free car parking spaces

Scottish businesses may be forced to pay extra taxes to their local council if they provide free car parking spaces to their staff or customers, under plans being considered by ministers.

The proposal was put forward by transport group Transform Scotland, which argued it could help to cut congestion and air pollution in the nation's cities, as well as providing cash for local services.

The organisation is calling for the Scottish Government to include the plan in its forthcoming Transport Bill, which is due to be tabled at Holyrood over the next few weeks.

The legislation is expected to include a series of measures aimed at improving public transport, such as giving councils new powers to create municipal bus companies and railway-style franchise deals.

Businesses may be forced to pay extra taxes. Picture Paul McSherry.

It says the policy could be applied to “workplaces as well as other types of premises”, raising the prospect of out-of-town retail parks having to pay the levy to provide free parking to customers.

Councils in England already have such powers. One scheme in Nottingham sees employers with more than 10 parking spaces for staff paying the council £402 per space each year.

“Parking levies are one of the most effective ways to control the use of private cars in urban areas,” said Professor Tom Rye of Edinburgh Napier University, who advised Transform Scotland.

“At a time where local authority budgets are increasingly stretched and funding for sustainable transport infrastructure is limited, parking levies offer a clear solution to fund improved transport infrastructure whilst simultaneously tackling issues with air pollution, carbon emissions and congestion.”

Transform Scotland director Colin Howden said the previous transport bills passed by the Scottish Parliament in 2001 and 2005 had been “ineffective” in cutting congestion or pollution and had failed to reverse a decline in bus use.

The group's report says it is “concerned” that the forthcoming legislation will not go far enough, calling for a range of other bold measures such as giving councils beefed-up powers to enforce bus and cycle lanes and banning all parking on pavements.

A spokeswoman for Transport Scotland described the report as a “useful contribution” to the debate on the Bill and said ministers would continue to engage with the group after its introduction.

However, its proposal on parking taxes was met with dismay by the Scottish Retail Consortium (SRC), which said it could push some shops and businesses into the red.

Ewan MacDonald-Russell, the SRC's head of policy, said: “We would be sceptical about the introduction of costly new workplace parking levies, especially if it opened the door to the levy being applied to parking spaces provided for customers of retailers, in retail parks and shopping malls.

“Restrictive and costly parking is already seen as a deterrent to shopper footfall. A levy like this could well be seen as yet another tax on firms which they can ill afford, and we understand business rates are already paid on workplace parking spaces anyway.”