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Workplace Parking - Your Choice, Your Saving

Parking at work is a significant additional cost for people whose jobs are based in our town or city centres. The Guardian newspaper recently reported annual rises of up to 30% that people working in UK town centres have to pay to park each day. Add to that congestion charges and public transport fare rises and it is clear that there is no low-cost option for the necessity of travelling to work each day.

For you, as an employee, this means spiralling costs for parking at work while, for your employer, it can lead to an increased turnover of staff. However, you now have the option to join a new scheme that gives you the benefit of cheaper parking at work by accessing HMRC approved tax savings.

Workplace Parking Scheme

The workplace parking scheme is an arrangement between you, your employer and the HMRC. Annual cost savings for workplace parking charges once you have signed up are typically in excess of 40%. Your employer's workplace parking scheme will be administered by an experienced, specialist company, working in partnership with your payroll team. The paperwork involved is very simple and, once you've joined up, you have the benefit of a dedicated helpline and website.

Annual cost savings for workplace parking charges are typically in excess of 40%.

Workplace parking schemes are part of a range of employee benefits that many employers now offer. The trend is moving away from traditional 'one size fits all' corporate benefits packages to employers offering a comprehensive range of benefits comprising a menu of options. Employees are then able to select from this menu, creating a system that is driven by the employee's individual need and individual choice.

Using this scheme to pay for your daily parking arrangements at work not only saves you money, but allows you to plan your expenditure and budget more effectively for your regular costs. The scheme puts you in control and, once set up, it leaves you free to concentrate on the valuable job you are employed to do.

How the Scheme Works

Once you sign up for the scheme, your employer will make arrangements for you to be provided with a car parking space at or near your place of work. You will pay for your parking space by means of monthly deductions from your salary. These deductions are made in a way that complies with HMRC's 'salary sacrifice' arrangements. This means that your payment, the proportion of your salary that you 'sacrifice' to pay for parking charges, is given full tax and national insurance (NI) relief. For lower rate tax payers, this means 20% tax and 12% NI. Those who are higher rate tax payers save 40% on their tax and an additional 2% on NI. Any saving is passed on to you in full.

This means that your payment, is given full tax and national insurance (NI) relief.

Your employer gains too, as they are not required to pay Employers' National Insurance on the amount you opt to have deducted. Employers' NU is currently set at 12.8%. In short, everyone gains from this scheme.

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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