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What is the difference between the workplace parking scheme and the workplace parking levy

The workplace parking scheme and the workplace parking levy are two very different schemes. Both of them affect people who have to take their car into one of our town or city centres each day in order to get to work, but it is important to understand the difference.

Two Very Different Initiatives

The workplace parking scheme is an HMRC initiative aimed at helping hard-pressed employers and their staff cope with the rising cost of using city centre car parks in order to attend work. It actually aims to put money back into the employee's pocket and, as a consequence, to stimulate the economic regeneration of our city centres.

Aimed at helping employers and their staff cope with the rising cost of using city centre car parks.

The workplace parking levy, on the other hand, is a scheme introduced by some local authorities to raise money to ease traffic congestion by improving public transport and upgrading the infrastructure, such as rail station improvements. The initiative places an annual tax on employers who provide their staff with free workplace parking. In most cases so far, the experience has been, employers will pass some or all of this charge onto their employees, costing them more than £200 a year.

Workplace Parking Scheme

This scheme aims to help people who work in town and have to pay to park each day because their workplace does not have free parking. Using HMRC's 'salary sacrifice' arrangements, employees can pay for a parking season ticket through payroll deductions and save up to 40 per cent on their annual cost of parking. At a time when many of us are subject to a pay freeze and, according to The Guardian, parking costs are rising by up to 30 per cent, this is a vital saving.

parking costs are rising by up to 30 per cent.

The scheme can save each employee a significant amount of money each year. It also helps the employer and stimulates urban regeneration by lowering staff turnover and improving employee morale. Furthermore, it helps employees plan their expenditure by consolidating their parking costs into one monthly payment.

Workplace Parking Levy

We can all applaud any local government effort aimed at reducing traffic congestion and improving the efficiency of public transport. However, this initiative, which was pioneered by Nottingham last year and is planned to be introduced by a number of other cities, is fraught with problems.

The Nottingham experience has been that many employers have passed on the annual £288 per parking space charge to each employee, putting further pressure on ordinary working people who are already hard-pressed in these difficult economic times. Furthermore, the scheme has fallen far short of its £10 million revenue target, raising only £8 million in its first year. Charges are, therefore, set to rise.

Act Now

Whether a Nottingham-style initiative is a good idea or not, is something that will be decided by the politicians in each city and by their voters. However, ordinary employees can act now, and make real savings, by signing up to the HMRC-supported parking scheme through their employer.

One thing that is clear, is that employees who currently pay for parking, can start to save money today, by taking up the initiative, and joining a parking scheme. Don't pay more than you have to to go to work.

Author: Eoin Olivers photo

Author: Eoin Oliver

Eoin Oliver is a web designer and blogger with six years of experience writing content and designing graphics for clients large and small. For the past three years Eoin has been focused on researching and writing about the childcare voucher scheme. When not hard at work, Eoin can be found in the company of his 4-legged companion Layla.

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