Though prohibited under HMRC rules, to date, many companies have treated their employees’ parking
fines as a tax deductible expense, however the situation has now been clarified.
A tax tribunal recently ruled that Security firm G4S cannot set its parking fines against its tax bill.
G4S Cash Solutions aimed to reduce their corporation tax bill by around £580,000 by doing this, but the first-tier tribunal has ruled in HMRC’s favour in rejecting the bid.
G4S incurred parking fines usually while delivering consignments of cash over the pavement. The firm claimed these were a business expense and so could be used to reduce its profits for tax purposes.
The tribunal ruled G4S staff consciously and deliberately decided to break parking restrictions for commercial gain.
The ruling upholds HMRC’s long standing view that fines for breaking the law cannot be used to reduce a tax bill. The tribunal has now established a clear precedent for rejecting any future such claims.
A final thought on this story. As customers would we want a security company van to be parked in a car park and the security guards then walk our money to the bank or shop concerned? There is some logic to security vehicles being parked as close as possible to the premises concerned, at least briefly. However that would make the story more about local authority parking regulations than tax which is what we’re concerned with here.
If you have any queries about allowable business expenses for the purposes of a company tax return get in touch with our team today.
