Can I Claim Parking Fees as a Business Expense?
Yes for business trips - no for commuting to your regular workplace.
What HMRC Says
Parking fees incurred on business trips are allowable. Parking at your normal place of work is not.
When You Can Claim
- Parking at client offices
- Event parking for business events
- Airport parking for business trips
- Temporary site parking
When You Cannot Claim
- Daily parking at your regular office
- Parking near your home office
- Parking fines (even on business trips)
Understanding Parking Fees Expenses
Parking fees follow the same fundamental principle as all business travel expenses: if the underlying journey is business travel, the associated parking is claimable. If the journey is ordinary commuting, the parking is not. This distinction catches out many directors who assume all parking during work is deductible.
For directors who work from home and have no fixed company premises, most of your parking will qualify because your journeys to clients, meetings, and temporary work locations are all business travel. The parking at those destinations is part of the travel cost. Airport parking for business flights, parking at conference venues, and parking at client sites are all straightforward claims.
However, if your company rents office space and you drive there daily, the parking cost at or near that office is commuting-related and not allowable. This applies even if you pay for parking through the company. Some directors try to structure this by having the company provide workplace parking, which is actually one of the few tax-free benefits in kind. Employer-provided parking at or near the workplace is exempt from BIK tax under ITEPA 2003, s237, provided it is primarily for business use. This means if your company arranges a parking space at your office building, that is tax-free, but the director claiming the reimbursement of daily parking receipts as a travel expense is not the same thing.
Parking fines are never deductible, regardless of whether they were incurred on a business trip. HMRC is clear that penalties and fines are not allowable business expenses. This includes council parking tickets, private parking charges, congestion charge penalties, and any other driving-related fines. The congestion charge itself, however, is deductible when incurred on a business journey.
For VAT-registered companies, most car parks do not provide VAT receipts, and local authority car parks are typically VAT-exempt. NCP and other private operators do charge VAT, and if you obtain a proper VAT receipt, you can reclaim the input VAT. Keep the receipt, as HMRC requires a VAT invoice to support any input tax claim.
Real-World Examples
Client site parking
Lucy drives from her home office to a client's warehouse in Birmingham for a full-day project review. She pays £12.50 for the car park. This is fully claimable as business travel parking, and she can also claim mileage at 45p per mile for the journey.
Airport parking for a business flight
David parks at Manchester Airport long-stay for 3 days while attending a business conference in Edinburgh. The parking costs £45. This is fully claimable as part of the overall business trip expenses alongside his flights and accommodation.
Regular office parking
Sophie drives to her company's rented office in Leeds five days a week and pays £8 per day in a nearby NCP car park. This is commuting parking and is not deductible. However, if the company negotiated a dedicated parking space as part of the office lease, that would be exempt from BIK.
Parking fine during a business trip
While parked at a client's premises, Tom receives a £70 parking fine for overstaying in a restricted bay. Despite the trip being genuine business travel, the parking fine is not a deductible expense. He can still claim the original parking fee itself.
Common Mistakes to Avoid
- Claiming daily commuting parking as a business expense when you have a regular fixed workplace that you drive to.
- Attempting to claim parking fines or penalty charges as business costs - these are never deductible regardless of the circumstances.
- Not keeping parking receipts because they are small amounts, then being unable to substantiate the expense when questioned.
- Forgetting to claim the London Congestion Charge on business journeys, which is a deductible travel expense (unlike fines).
Frequently Asked Questions
Can I claim parking at the train station when I take the train for business?
Yes, if the train journey is for business travel, the associated station parking is part of the travel cost and fully claimable. The entire business journey cost including train ticket, station parking, and any connecting taxis can be claimed.
Is the London Congestion Charge a claimable expense?
Yes, the Congestion Charge and ULEZ charge are deductible when incurred on business journeys. They are treated as travel costs, not fines. However, penalty charges for non-payment are not deductible.
Can I claim parking at my home office?
No. Parking at your home is a personal living expense. If you work from home, the parking at your home is not a business cost. Your business travel starts when you leave home, and parking at your destination is what is claimable.
Do I need individual receipts for parking meters?
Ideally, yes. Many councils offer digital receipts via parking apps like RingGo or PayByPhone, which provide a transaction history. These digital records are acceptable for expense claims and HMRC enquiries. Keep a note of the business purpose for each parking charge.
Can my company provide me with a free parking space at the office?
Yes, and this is one of the few tax-free benefits. Employer-provided workplace parking is exempt from Benefit in Kind tax. This is different from reimbursing parking costs, which would need to qualify under travel expense rules.
Source: HMRC Employment Income Manual EIM31815 and EIM31820 - Travel expenses, and ITEPA 2003 s237 - Workplace parking
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