Car park operator NCP makes almost £700,000 a year from ticket machines that don’t give change back to motorists, it emerged in the High Court.
The firm, which is the largest car park operator in the UK with more than 600 sites, was in court to attempt to recoup money from HMRC, which had charged VAT at 20% on the overpayments.
Between June 2009 and December 2012, NCP kept more than £2.4m in overpayments – equating to around £680,000 a year – from machines that wouldn’t give change back to drivers.
The taxman took a fifth of this in VAT payments – just under £490,000 – and the company had the gall to go to court to demand this money back because it claimed it hadn’t provided services in return for the cash.
The overpayments would typically occur when, for example, a motorist would pay for a £1.40 charge with a pound coin and a 50p piece and wouldn’t receive 10p change.
Lord Justice Newey, ruling on the case with Lord Justice Patten and Lord Justice Males, dismissed the appeal saying the total sum handed over should be deemed the fee they have paid to pay to park.
“This appeal concerns a situation familiar to motorists,” he said. He added: “I consider that if a customer pays £1.50, that amount is the value given by the customer and received by the supplier in return for the right to park.”
NCP is now saddled with legal costs believed to run into tens of thousands of pounds. The company made an operating profit of £10.3million in 2016, on a turnover of £202million.
AA president Edmund King said: “The best way out of this would be to give motorists change in the first place. Drivers who have wanted to give left-over parking time to another motorist but been prevented by measures to stop tickets being transferred will have a wry smile on their face when they hear this court ruling.”
RAC spokesman Pete Williams said: “Everyone who has been unlucky enough to be fleeced in such a way by a car park operator will view this appeal with utter contempt.”