Multi-storey public car parks face 20 cent hike

MOTORISTS will be hit with a 20 cent per hour hike in parking charges in Cork’s publicly-owned multi-storey car parks from July 1.

However, bin charges will not be affected and will remain unchanged for the rest of the year, city manager Joe Gavin said last night.

The hike in parking charges is a direct result of a European Court of Justice ruling in July 2009 that local authorities and public bodies must impose VAT on a range of services to avoid distorting the market between private and public operators.

Private operators already pay VAT on such services.

The Government introduced VAT on a range of local authority services, including waste collection, recycling, off-street parking, toll roads and the operation of leisure facilities in February’s Finance Bill.

Last month, Cork City Council became one of the first local authorities in the country to outline the effect the EU ruling will have on how it charges for services and Mr Gavin warned that parking charges would rise.

Last night, he brought a report to councillors which showed that the city council will have to pay VAT at 21% on all income generated in its multi-storey car parks from July 1.

“In order to meet part of the cost, charges in the multi-storey car parks will be increased by 20 cent per hour,” he said.

“This will meet approximately 50% of the VAT bill. The council will absorb the balance and will seek to fund it by maximising income and marking further savings across the board.”

He also said that despite the fact that the council will have to pay 13.5% VAT on its refuse collection service from July 1, bills have already issued for the fixed annual charge and they will not attract VAT.

And while the bin collection tag charges will be liable for VAT from July 1, it is not proposed to increase the charge, he said.

This cost will also be absorbed by the council, he added.

Fianna Fáil councillor Sean Martin urged Mr Gavin to spread the parking increase across both on and off-street parking.

But Mr Gavin said increasing the cost of on-street parking is a drawn-out process and that it is possible to increase the cost of multi- storey parking charges overnight.

Other council services which have been hit by a 13.5% VAT rate and the cost of which is likely to rise are tolls, supply of new houses, dishing (the lowering) of sections of footpaths, waste collection, recycling, sale of burial plots and grave reopening fees.

A 21.5% VAT rate will be applied to a range of services including off-street parking, the replacement of wheelie bins, and the council’s car removal service.

The impact of the VAT ruling on these and other services is still being assessed.