The Department of Transport does not recommend implementing a car parking levy at this time and favours other tax-based measures to discourage private car use by workers.
That is according to a paper published by the Department of Finance's Tax Strategy Group ahead of Budget 2025.
A flat charge on urban workers who are offered a car parking space by their employees was first mooted 16 years ago, with legislation introduced in the Finance Act 2008.
It was intended to incentivise workers to opt for more sustainable modes of transport in order to reduce emissions and congestion.
However, the legislation has yet to be commenced.
A review by the Tax Strategy Group says the levy has the potential to achieve its key objectives, with similar schemes in other countries being credited with significantly reducing vehicle emissions and congestion.
However, it says its success would be heavily dependent on a number of factors, including the further development of the country’s public transport system.
It cites international examples of a successful car parking levy, including Nottingham and Sydney, but says they had well-developed, robust and integrated public transport systems in place before the scheme got underway.
The TSG says a levy would also need sufficient buy-in from the public - with the potentially uneven impact of such a scheme potentially creating problems.
For example the levy would disproportionately impact workers who did not have remote or hybrid working options, or those who worked irregular shifts.
The levy could also impact women more than men, it said, as research shows that women tend to have more complicated travel patterns due to the increased likelihood that they undertake caregiving duties as part of their commute.
The TSG says that, if the levy were to be implemented here, it could only be done so after extensive planning and consultation.
