Yet again, local government is coming up with taxes that penalise our hard pressed businesses just when they don’t need it. While other councils have passed on the idea, Bristol City Council (BCC) has taken up the Workplace Parking Levy (WPL) with enthusiasm. They want to charge £1 a day per employee for companies with their own car parks in order to help pay for its £194 million Rapid Transit Scheme—essentially three expensive extra bus routes. But local businesses are fighting back, pointing out that it will end up being a costly own-goal.
‘The impact of this tax on the commercial viability of our company is extremely heavy,’ says Andrew Varga, Director of Seetru Ltd. ‘Consider: we employ 130 people and work six days a week, simple maths shows that £1 per day per employee plus visitor spaces mounts up to a substantial annual tax. This tax will cost us substantially more than our Corporation Tax.’
Seetru is an industrial manufacturing company based in the centre of Bristol. They have provided an internal car park so that their employees do not contribute to city parking congestion. ‘Not only are we paying for the provision of a car park for our employees,’ argues Varga, but if the WPL goes ahead, ‘we are also to be expected to pay an extremely heavy price—tax—for a second time so as to enable our employees not to contribute to the parking congestion in the future. In these circumstances it will be far more cost effective and practical for us to require our employees to park on the streets.’ That would be somewhat of an own-goal for BCC, would it not?
The impact of this tax will be to penalise those companies that have taken the socially responsible option of creating their own parking spaces, whereas employers who do not provide any parking at all will escape the tax altogether and, indeed, could benefit as other companies struggle with the extra burden.
‘There is an implicit assumption in regard to such a tax that business can just provide more money to meet local government’s spending aspirations,’ says Varga. ‘This is a huge attack on our competitiveness and thus our business. We employ 130 people so we support 130 families in Bristol. We are not a wealthy, high revenue aerospace, defence or financial services business. We have to fight for every pence on our selling price against global low cost economies. This is a burden applied at the wrong place for the city and the country.’
‘We believe the company should not pay,’ says Bristol Cllr Tim Kent, Executive Member for Transport, in response to Varga’s argument, ‘but pass on the £1 parking cost to the person that benefits from the parking space so it would be at nil cost to the company.’ That is the employee. ‘This is not a tax on employment.’
‘Even if it were feasible for us to consider passing the cost on to our employees, which it is not,’ says Varga, ‘the practicalities of handling collection are intractable, a small company car park does not operate in the same manner as a public pay car park, we have no infrastructure for pay on entry or for recording who drove to work on a particular day, nor are there allocated parking spaces. Many parking places are reused during the day, so who should pay what and how can this be managed—more cost.’
As most companies will pass this cost on to their employees, trade unions are against it too. ‘Many people are on pay freezes,’ says the secretary of the local trades council. ‘It would mean having to find more than £20 a month, with the rising cost of living that would be to the detriment of working people.’
‘It would be £1 a day now, but the council would get addicted to this tax,’ says the spokesman for the Bristol branch of the Federation of Small Businesses. ‘The scheme would be expanded to cover an ever greater area, and once these bendy buses start running and start losing money, the council would up the rate from £1 to £2 to £5 to subsidise these ridiculous buses.’
‘We accept that nobody wishes to face additional financial burdens,’ says Cllr Kent. ‘This is why if we proceed with a levy the earliest a charge would be is 2016. The other main option we are considering is a business rate supplement.’
So the private sector will have to cough up yet more money to subsidise the costly grandiose plans of local council whatever happens! With such an attitude, I think the councillor is optimistic that our economic crises will be over by 2016—as it is hard-working companies like Seetru and their employees that are expected to pull us out of recession.
Tim Newark, Bath & South-West TaxPayers’ Alliance