Vat on parking income costs cash-strapped city council €2m

A new tax on pay-parking income has cost a cash-strapped local authority over €2m in two years.

City manager Tim Lucey revealed the full impact of the Vat changes at the last meeting of Cork City Council.

Cllr Seán Martin (FF) asked the manager for details on how much Vat the council had to pay on off-street pay-parking income since changes to the system were introduced in mid-2010.

The tax changes required local authorities to pay Vat on all off-street parking income from Jul 1, 2010.

It applies to all income derived from the surface-level car park at White St, and the city’s two publicly owned multi-storey car parks at Paul St and North Main St.

The Vat is also charged on 25% of the income generated from the Black Ash park-and-ride facility at the Kinsale Rd roundabout, where motorists pay €5 to pay and take the bus, because the bus transportation element is exempt.

Mr Lucey said the total Vat bill on all the income derived from these sources has cost the city a total of €2,097,215 since the changes came in to effect.

He said parking charges at the two multi-storey car parks have been increased by 20c per hour in order to meet 50% of the Vat bill.

But there has been no increase in fees for the park-and-ride, or for the White St car park, he pointed out.

Mr Martin criticised the tax changes and said the Vat bill effectively represents a loss of income for the city council because there has been no increase in funding to compensate for the new Vat bill.

Meanwhile, Mr Lucey has clarified the specific circumstances where the council can be held liable for damages caused by potholes.

Cllr Mick Finn (Ind) criticised the state of the roads and the slow pace of pothole repair, and asked whether the council can be held liable for damages to vehicles caused by potholes reported for repair.

But Mr Lucey said the council is not exposed to liability in damages for loss or personal injury in respect of its failure to repair potholes within the city boundary.

He said failure to carry out such repairs “clearly comes within the defence of non-feasance” which is available to local authorities.

“No additional liability will be imposed on the council in relation to non-feasance, where a pothole has been identified and report to it with a request for its repair,” he said.

But he said if the council repaired a pothole, and an accident occurred following that repair, the council would be liable if the repair was carried out negligently or if inadequate warning was given to road users.