Last updated: 14 October 2026
Can you reclaim VAT on car parking charges without a VAT invoice?
Sometimes. HMRC allows VAT-registered businesses to reclaim VAT without a VAT invoice on off-street car parking paid at coin-operated meters, where each supply is £25 or less including VAT. For other car park charges, you need a VAT invoice or a receipt showing the supplier’s VAT number. On-street council parking (meters and pay-by-phone) is outside the scope of VAT, so there is no VAT to reclaim.
Types of parking and their VAT
| Parking | VAT position | Reclaim? |
| On-street council meters and bays | Outside the scope | No VAT to reclaim |
| Off-street car parks (private or council) | Standard-rated at 20% | Yes, with evidence |
| Station and airport car parks | Usually standard-rated | Yes, with a VAT receipt |
| Parking fines and penalty charge notices | Outside the scope | No |
| Parking included in a hotel bill | Follows the hotel’s VAT | Yes, with the hotel’s VAT invoice |
The £25 rule
For certain small payments of £25 or less including VAT, HMRC doesn’t need a VAT invoice. They are:
- off-street car parks paid at coin-operated machines
- road and bridge tolls, where they are subject to VAT
- calls from public or private payphones
You must still record the date, the supplier and the amount, and the parking must be for business purposes.
App and card payments
Many car parks now take payment by app, such as RingGo or JustPark. These usually issue a VAT receipt through the app. Download it, because it may show both the parking charge and a separate convenience fee, which can have different VAT treatments.
Employees’ parking expenses
If you repay an employee for business parking, you can reclaim the VAT if you keep the receipt and the trip was for business. Commuting to a permanent workplace is not business travel.
Example
A sales manager pays £18 at a pay-and-display machine in an off-street car park, plus £12 by app at a station car park with a VAT receipt. The business can reclaim £3.00 on the £18 (1/6) under the £25 rule and £2.00 on the app payment.
Record-keeping tips
- Ask for a VAT receipt whenever you can
- Use receipt-capture apps such as Dext; see Receipt Bank (Dext)
- Keep a mileage and parking log that shows the business purpose
Parking for directors and employees
When a company pays for business parking for a director or employee, it is a business expense and not a taxable benefit. Parking that the employer provides at or near the employee’s workplace is also exempt from income tax. However, if the company simply reimburses an employee’s own parking costs near their permanent workplace, that is usually taxable as earnings. Keep these costs separate in your bookkeeping so VAT and benefits are treated correctly.
Frequently asked questions
Is the VAT on a parking fine reclaimable?
No. Fines are not supplies, so they have no VAT.
Can I reclaim VAT on parking at my own office?
Yes, if it is a business cost with a VAT invoice. Free workplace parking for employees is not a taxable benefit.
Do council car parks charge VAT?
Off-street council car parks do. On-street parking doesn’t.
What if the receipt has no VAT number?
For amounts over £25, you need a valid invoice to reclaim.
Related: VAT on employees’ mileage.
Talk to Accotax
Want this handled for you? Our team at Accotax can help with VAT on travel and expenses. See our VAT accountants service, or contact us for a free, no-obligation quote.
This page is general guidance based on HMRC rules for the 2026/27 tax year, checked against gov.uk on 14 October 2026. It is not personal advice, so speak to an accountant about your own situation.
