VAT liability of overpayments in car park machine

The council operated pay and display off-street car parking. A dispute arose over the VAT treatment of an overpayment for parking. For example this would apply where an hour’s car parking costs 90 pence but the vehicle owner only had a pound coin so voluntarily overpaid 10 pence knowing the machine did not give change. In an earlier appeal by the same council on the same matter in 2012 (TC2342) the First-tier Tribunal accepted the council’s claim. HMRC did not appeal.

However later the Court of Appeal’s decision in National Car Parks Ltd v CRC [2019] EWCA Civ 854 confirmed HMRC’s view that overpayments voluntarily made by vehicle owners because they did not have the right change for a car park machine were subject to VAT.

In this second appeal the taxpayer argued that its case was ‘distinguishable from NCP’...