No consensus

The taxpayer was a local authority that operated car parks with ticket dispensing machines.

A sliding-scale hourly rate applied but no change was provided which led to some users having to overpay because they did not have the correct money. The local authority treated the overpayments as a non-business supply not liable to VAT.

HMRC argued that VAT was due on the total amount paid including overpayments because it was consideration for the supply of car parking.

The department’s view was corroborated by the fact a ticket acted as a receipt and could be used as a simplified invoice to recover VAT on the whole amount shown.

The First-tier Tribunal said the “critical question” was whether or not a link existed between the total payment made for parking and the supply of parking services.

A paying member of the public understood no change was given by the...