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Vat (Car Parking Facilities)

Volume 406: debated on Wednesday 11 June 2003

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To ask the Chancellor of the Exchequer when facilities leased or let for parking a vehicle became subject to differential VAT treatment according to whether they are leased or let alongside other property; what the justification for the differential was; what plans he has to review this differential; what discussions he has had with EU counterparts to review this differential; and when he next intends to discuss with EU counterparts an extension of the scope of VAT exemption to remove this differential. [118242]

EC VAT legislation dictates that the leasing and letting of residential property by private landlords is exempt from VAT. However, the letting of parking facilities is specifically excluded from this exemption and is consequently taxed at the standard rate of VAT. In 1989, the European Court of Justice examined the VAT treatment of parking facilities supplied together with residential property by the same landlord to the same tenant. They ruled that this was a single supply of services, and that the whole supply should be exempt from VAT. All member states were therefore required to comply with this ruling and exempt the supply of parking facilities in these specific circumstances. Under the long-standing formal agreements which govern the EC VAT regime, no member state is permitted unilaterally to extend this exemption to the separate supply of parking facilities.