Member Article

Workplace Parking Levy scheme

With Watson Burton LLP Law Firm

On 1 October 2009 the Workplace Parking Levy (England) Regulations 2009 will come into force.

The Regulations enable local traffic authorities in England (excluding those in Greater London) to introduce workplace parking levy licensing schemes, imposing a levy on employers and educational establishments on the amount of workplace car parking they provide.

Local authorities will have autonomy to decide whether to implement the scheme and will be responsible for deciding how the schemes will operate, including charging levels and exemptions. The principal aim of the levy is “to provide an incentive to employers and educational establishments to discourage car commuting and use alternative modes of transport (including car-sharing)”. It is hoped that by encouraging commuters to use other means of transport, towns and cities will see a reduction in congestion, pollution and carbon emissions.

The first levy scheme is likely to be introduced in Nottingham in 2012 and it is likely that other local authorities will follow, with a number of other councils across the country expressing interest in the scheme. The Core Cities Group, representing Birmingham, Bristol, Leeds, Manchester, Liverpool, Sheffield and Newcastle, have also expressed interest, recognising the potential the levy has to combat pollution and congestion.

Nottingham’s proposed scheme is likely to mean that any company with 11 or more parking spaces for staff will be charged from £250 per year per space.

Revenues from workplace parking levy schemes must be re-invested in local public transport, with a view to reducing traffic problems for the benefit of local businesses and residents.

Those in favour of the levy believe this is the fairest way to pay for much needed improvements to public transport in comparison to road congestion charges, which see all road users charged (including tourists, residents travelling to shop and other visitors), not just commuters.

Campaigners for improved transport welcome the introduction of the levy as it may tackle unnecessary commuter journeys, one of the main causes of congestion. It is also believed that businesses will benefit from a reduction in lost working time and the attraction of new businesses and clients to participating cities as a result of the regeneration of the transport systems.

Many businesses are however voicing their disapproval of the levy. The levy is seen by some as a “stealth tax” on business, with its aim being questioned. Those opposing it are asking whether the levy is a qenuine attempt by the Government to reduce congestion and pollution or whether it is simply a method of generating more funds for councils at the expense of local businesses.

With current unemployment figures heading towards three million and companies struggling in the recession, parking levy schemes will add to the pressures faced by businesses. The cost of the levy to businesses has been estimated at more than £3 billion if adopted nationwide. Approximately ten million people drive to work every day in Britain. In order to avoid the charge it is anticipated that many employers may pass this cost on to their employees.

To alleviate the financial burden on businesses in light of the current economic climate, the Government has agreed to delay levy collection until April 2012.

If you have any comments or questions about this article or any employment matters, please contact Louise Kemp of Watson Burton LLP at louise.kemp@watsonburton.com.

This was posted in Bdaily's Members' News section by Ruth Mitchell .