It was reported on Friday (This is Money) that the Isle of Wight council was one of four local authorities that have been unsuccessful in the latest round of a bid to claw back VAT on off-street parking charges.
IWC, along with West Berkshire, Mid-Suffolk District and South Tyneside Metropolitan councils have, since the year 2000, argued that collecting the money was part of their traffic management duties, so exempt from VAT.
The Revenue position was that allowing councils to avoid VAT on parking spaces would hit private operators.
No cost to the council
Fortunately, the council tells us that legal action has not cost them a penny, as it’s been done on a ‘no win, no fee’ basis.
As the council has continued to pay the VAT that Customs and Excise has requested, no additional money will need to be found to pay off the backlog.
An Isle of Wight Council spokesperson said, “Although the recent outcome is disappointing, the council along with the other local authorities involved in the legal case will now meet to discuss the way forward.”
Image: meddygarnet under a CC BY 2.0 license
