Parking Charges

Parking Charges

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We have a client who works in the Construction Industry. During 2005/06 he worked in the square mile in London area incurring parking charges totalling about £7,500 on average on it’s own. His turnover for the year is around £30,000. However, he does not have receipts for these parking charges, as these transactions were through coin operated meter boxes. As this is a very high amount, we are concerned the tax office may attack the expense claimed on the grounds that it is excessive & not backed up by any receipts. The client is not required to keep timesheets but the Contractor & other subcontractors on the site who our client worked with can vouch for the time spent in parking. Are our concerns justified? If anyone has come across such a situation where the tax office have attacked such payments can you please advice how you successfully sustained your argument in favour of your client?

Kailash Khagi

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DougScott
By Dougscott
19th Jan 2007 14:28

Two sites
I remember ages ago hearing that a contractor had to work at at least two different places during a year to be able to claim travel costs. I think this is stated somewhere in the HMRC manuals. Can anyone confirm?

The contractor would presumably have had to pay the Congestion Charge in London so that should provide additional evidence of when he was in London as presumably he paid that electronically?

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Stephen Quay
By squay
18th Jan 2007 23:15

No Receipts for VAT
Don't forget that Customs & Excise do not require vat receipts for street parking. I think this is mentioned in the VAT Guide 700.

What's good enough for them! And aren't IR and C&E all joined up now!

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By martinfoley07
18th Jan 2007 14:05

two different aspects
(i) legally, there is no need to have a receipt as such to make any self-assessed expense deduction (I think we can safely forget the HMRC "normal" ackowledgement that the occasional parking meter will have no receipt!!). The tax payer and agent have to know/believe the expense to have been paid,and to have been wholly and exclusively incurred (assuming self-employed) for the business. If he operated through a company, there will be technical queries about necessarily, and his normal place of work.(see also last paragraph).

(ii) of course the Tax Office is likely to attack this !!! Presumably he has motor costs as well, so his motoring expenses alone will likely be well be over 1/3rd of his gross turnover !! I suspect that may trigger the somnulent computer. Then it is a question of presenting the case and evidence. Expect some pretty robust scepticism (after all, even you sound a tad sceptical). Why on earth pay that amount in parking instead of taking a combination of cabs, trains, buses etc ? It is indeed an eye watering amount. But, just present the facts, the evidence, and argue the case.
Also expect them to delve into status issues if he claimes self-employment, and especially if this parking was at the one site all the time - if HMRC can win argument he was employee, and this was his normal place of work, he would of course have zero deductibility.

Good luck !! It is "a question of fact" - just need to establish the facts to satisfaction of HMRC (or Commissioners !!)

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