Small businesses outraged at plans to tax their own car parking spaces

Small businesses are outraged at the Governmentís plans to tax them for using their own car parking spaces. Under the Transport Act 2000, local authorities have the power to introduce Workplace Parking Levy (WPL) schemes, allowing them to charge firms which provide employees with private parking.

The Department for Transport is seeking feedback on how measures in the Act should be implemented. The Forum of Private Business (FPB) is responding by petitioning the Government to scrap the legislation altogether, believing it is unfair, discriminates against small-business employers and will force many more struggling firms to close.

The tax burden is already a major problem for small businesses which are struggling to survive the recession. The Government should be working hard to support businesses and relieve this burden, not add to it, said Phil Orford, the FPBís Chief Executive. Some employees have no choice but to drive to work, which means that getting rid of parking is simply not an option for most small businesses. WPL schemes would cost them thousands of pounds per year and local economies could be seriously hurt as a result.

He added: The imposition of steep parking charges is a huge issue for high street retailers, which are experiencing a significant decline in trade. Often, local councils readily place short-term revenue-raising above facilitating real economic growth. This stealth tax on parking smacks of more of the same.

In its response to the Governmentís consultation, the FPB outlined its opposition to the legislation, arguing that the WPL will have a damaging and disproportionate effect on small businesses, including those with more than 20 employees. The FPB has submitted a petition to the Government calling on it to abandon the legislation.

The FPB is concerned that the introduction of WPL schemes could have the following consequences for small businesses struggling as a result of the economic downturn:

Firms will continue to close if nothing is done. This will lead to more redundancies. The Government should be helping small firms at this time, not adding to the burden and cost of running a business.

Businesses will cease to provide staff parking facilities. Staff will park on surrounding residential roads or take up parking provided for visitors to towns and cities. The economies of these towns and cities are likely to suffer as a result.

Towns and cities introducing WPL schemes will become uncompetitive compared to those which do not. Businesses will consider relocating and local economies will suffer further.

Richard Geater runs LF Geater and Sons Ltd, a small family firm in Suffolk. His workforce varies between 18 and 25 members of staff. He is concerned about the impact of the WPL on local communities.

About 75% of our staff drive to work. Discouraging people from driving to work would be divisive as some obviously need to, said Mr Geater. The result of this would be that even more cars would be parked on roads, where they will add to congestion. It is my view that businesses should be encouraged to provide off-street parking, as parked cars are a hazard to pedestrians wishing to cross roads.

Pauline Birdsall, who owns Key Air and Sea Ltd, a freight company based in Middlesex, said: The message from the Government is just more of the same: it is consistently penalising companies for offering employment to people. How does it really imagine that this is a good thing?

So far, Nottingham City Council is the only authority planning to introduce the WPL. Should the charges ultimately be introduced, despite the opposition of business owners, the FPB is urging the Government to follow through on its pledge to ëmitigate the impact of WPL schemes on business, especially small businessesí. In this light, the definition of the term ësmall businessí, as written in the Act, must be aligned with the one already used by both the UK and European Union (EU) – a business with fewer than 50 employees and a turnover of less than EUR 10 million.