Updated: 28 October 2025 (UK).
Executive summary
- In February 2024, the Court of Appeal found that income from an NHS-operated car park is outside the scope of VAT, because the NHS is acting as a public authority under a “special legal regime” (including the NHS 2015 Parking Principles).
- HMRC appealed. The Supreme Court heard the case in April 2025, and judgment is still pending at the time of writing.
- Around 50 NHS Bodies are understood to have claims “stood behind” the Northumbria case, with tens of millions of pounds of VAT potentially recoverable across the NHS. The Court of Appeal’s reasoning concerns NHS-operated car parks only.
While the final position awaits the Supreme Court outcome, NHS Bodies should protect their claims, evidence their “public-authority” framework, and plan for both outcomes to minimise risk and preserve value.
What the dispute is about (in plain English)
The question: Are NHS hospital car-parking charges a taxable supply for VAT, or are they outside the VAT system because the NHS provides parking as a public authority under a special legal regime?
The Court of Appeal’s answer (Feb 2024):
- The provision of hospital parking operated by an NHS trust is sufficiently bound up with the NHS statutory framework (including the 2015 Parking Principles), so the NHS Body is acting as a public authority for this activity and is not a taxable person in that context.
- There is no material distortion of competition from this treatment, given the nature of hospital parking (primarily for patients, visitors and staff) and the limited overlap with commercial car parks.
Scope matters: This decision focused on NHS-operated car parks. Car parking provided by an outsourced provider or by a PFI company is unaffected, as they are not public authorities.
Current status and why it matters
- Timeline so far: First-tier and Upper Tribunals originally found for HMRC; the Court of Appeal reversed that in February 2024; HMRC appealed to the Supreme Court; the hearing took place in April 2025; judgment is pending.
- Financial exposure/opportunity: Many trusts have lodged “stood-behind” claims. Sector commentary has placed the historic VAT at stake in the tens of millions of pounds, with some trusts facing material cash impacts depending on the final outcome.
- Operational impact: Pricing displays, signage, websites, back-office systems, and communications with patients and staff may all need rapid changes once the final decision lands.
Practical guidance for NHS VAT officers
1) Claims management and deadlines
- Protect time limits now. If your Trust has historically accounted for VAT on car-park income, ensure protective claims (or updates to existing claims) are submitted on time. Late claims risk being out of time.
- Keep claims live and evidenced. Maintain a clear technical narrative, calculations/interest workings, and supporting documents so your claim can be processed quickly once the court position is final.
2) Review how each car park is operated
- NHS-operated sites: Assemble an evidence pack that links operational decisions to the NHS statutory framework and the 2015 Parking Principles (governance, pricing policies, concessions, patient-first considerations, equality and access measures, board minutes, SOPs).
3) VAT accounting and future treatment
- Interim approach: Where the treatment is uncertain pending judgment, document your position, maintain robust reconciliations, and keep system changes scoped so you can pivot quickly.
- Pricing & comms readiness: Prepare two switch plans (NHS wins vs HMRC wins) covering: POS systems, e-commerce, tariff boards/signage, patient and staff communications, and website copy.
4) Wider impact and planning
- Look beyond parking. Map other income streams that may share public-authority characteristics or sit within a special legal regime and assess whether similar arguments might apply—and where competition concerns could differ.
- Consistency of evidence. Create a standard “SLR evidence bundle” across sites: policy documents, concession frameworks, traffic/occupancy data, clinic patterns (e.g., oncology/renal), and local transport context.
Action checklist (this month)
Protect the past
- Catalogue car-park income by site and operating model (NHS-operated vs outsourced).
- Submit or update protective claims with schedules, calculations and interest.
Evidence the “public authority” framework
- Collate the Parking Principles compliance trail (policy approvals, pricing rationale, concessions, patient/staff priority, equality/access considerations).
- Keep meeting notes and decisions that show the statutory and patient-first lens.
Plan for both outcomes
- If HMRC wins: prepare to re-impose VAT swiftly, refresh signage/web copy, re-train cashiers and update POS.
- If the NHS wins: prepare to remove VAT, consider tariff recalibration, and trigger repayment workflows where appropriate.
Align stakeholders
- Brief Finance, E&F, Procurement, Patient Experience and Comms teams. Establish a single source of truth for treatment, evidence, and messaging.
NHS Car-Parking VAT FAQs
Does this apply if our car park is fully outsourced?
Not automatically. The Court of Appeal focused on NHS-operated car parking. Outsourcing, PFI or PPP structures may point to a different supplier, pricing control, and risk profile, which can change the VAT analysis.
Can we stop charging VAT now?
Some Trusts have adjusted in anticipation; others are awaiting the Supreme Court decision. Your decision should balance litigation risk, cash impact, operational change costs, and the strength of your evidence, and it should be documented.
We’ve already filed a claim—what next?
Keep it current and well-evidenced. The best-prepared claims will progress faster once judgment is released.
How CRSTAX can help (NHS-specialist VAT)
Parking VAT Rapid Review (2–3 weeks)
- Site-by-site operating model map, claims triage, and an SLR evidence pack aligned to the Court of Appeal reasoning.
Protective Claims & Calculations
- End-to-end quantification (including interest), technical narrative, and ready-to-file schedules.
Board & Audit Committee Briefing Pack
- A balanced risk/options paper, cash-flow modelling, signage/website changeover plan, and communications templates.
Ready to protect your position before judgment?
1) Rapid Parking VAT Review (free scoping call)
Get a 20-minute triage with our NHS VAT lead: confirm eligibility, map your operating models, and agree next steps. [Button] Book your slot
2) Claims & Evidence Pack Builder
We compile the SLR evidence bundle (Parking Principles, governance, pricing, concessions) and quantify recovery with interest. [Button] Request a proposal
3) Outsourcing/PFI Diagnostics
Not NHS-operated? We’ll analyse contracts, pricing control and supply chains to validate treatment, or design the compliant alternative.