A very common question in the world of business expenses is “are parking fines tax deductible?” and to be completely honest the answer to this question will differ depending on who you’re asking! However in this article I’ll explain my personal advice on this matter, coming from the opinion of a Chartered Management Tax Accountant.
The Controversy Around Claiming Parking Fines
The subject of whether a parking fine is or isn’t a claimable expense causes much controversy in our industry, mainly because it is something of a ‘grey’ area within the business accounting world and therefore many people aren’t sure whether you are able to claim them as taxable expenses.
The problem is this, HMRC regulations state that they will not allow any taxable expense which is ‘law breaking’ – however many people do not see a parking fine as ‘breaking the law’ like a speeding ticket for example, and here’s where the controversy begins. Many Accountants believe that if you are issued a parking ticket by a local authority (Council-Owned Car Park for example) then this falls under local jurisdiction and is therefore breaking the law and not a taxable expense. However! Using this same notion, if you were to be issued a parking fine by a privately owned car parking firm (NCP or Indigo for example) then this is technically not ‘law breaking’ but instead considered ‘rule breaking’ since you are simply breaking the rules outlined by the private parking firm and not a law outlined by a local authority.
So using this mind-set, many Accountants believe that Council-issued parking fines aren’t taxable expenses but fines issued by a privately-owned parking company are taxable expenses and can be claimed. Here’s why I personally disagree:
In 2016 a precedence-setting tribunal found that the security company G4S couldn’t claim their parking fines as a taxable expense. I won’t go into huge detail but the main points were that G4S racked up a huge amount of parking fines due to their security fleets parking wrongfully whilst collecting money (you know the ones, they look like SWAT teams with the protective clothing/helmets and collect money from banks etc into the back of large vans?). They tried to claim approx 10,000 parking fines as taxable expenses and HMRC rejected them all and the whole case ended up going to tribunal in which they sided with HMRC and G4S couldn’t use any of the fines as allowable expenses.
Can I Claim Parking Fines as Allowable Expenses?
So having read all of the above do you think you can claim parking fines as allowable expenses? My personal belief is NO. You cannot claim for any type of parking fine whether it was issued by a local authority or privately owned parking firm.
Some Accountants out there still feel that you can legally claim for parking fines issued by privately owned parking firms as long as you can prove that you were parking for business, since they’re not law-breaking. However I am personally a ‘once bitten twice shy’ kinda-guy and following the ruling from that 2016 tribunal where HMRC beat a multi-million pound company trying to claim their parking fines…my advice is to not even bother. Any indiscretions like this within your tax returns can flag up other issues, causing a HMRC audit and possibly some hefty fines.
So better safe than sorry in my opinion – do not claim for parking fines no matter who issued them.