The costs of driving to work could soon be going up.

To discourage the use of private cars, local councils and governments are considering adding an annual tax to car parking spaces provided by employers. This is known as a workplace parking levy, and cities in the UK and Australia have introduced it. And it’s proving successful at:

Reducing carbon emissions;
Creating employment opportunities;
Generating more investment in public transport.

As travel is a major cause of carbon emissions, and most countries are working towards climate targets, workplace parking taxes could soon arrive in more countries and cities.

What is a workplace parking levy?

In Nottingham, UK, companies with 11 or more parking spaces are paying £428 a year per space. And this rises in line with inflation.

Who pays for this is up to the employer. They can either cover the bill themselves or pass the charge onto employees. Exemptions are made for essential spaces such as disabled parking and loading bays, and for the emergency services.

All raised revenue must be invested into improving public transport, which helps to improve air quality and ease congestion.

Locations with workplace parking taxes

Workplace parking levies are live in cities across Australia (Perth, Sydney, and Melbourne) and the UK city of Nottingham.

Following the scheme’s success, many other councils across the UK plan to introduce the tax. And in Scotland, the government has allowed local authorities to introduce the levy.

Depending on the success in these regions, more countries could follow.

Why workplace parking levies are being introduced

The daily commute produces 25% of Europe’s carbon emissions. This has played a big part in travel emissions in Europe rising 33% between 1990 and 2020.

And that’s because most people travel to work in a private vehicle:

50% use a private vehicle;
16% take public transport;
12% use a bicycle.

Graph showing that most workers across Europe drive to work which could mean paying a workplace parking levy

It’s hoped that a workplace parking tax will discourage employees from using their private vehicles to commute.

Are workplace parking taxes effective?

Nottingham’s workplace parking levy raised over £25 million in its first three years.

These funds have been reinvested into public transport, and now Nottingham has:

The largest fleet of electric buses in Europe;
Extended tram routes;
Improved cycling infrastructure.

This investment encourages more use of public transport too — over 40% of work journeys in Nottingham are now made by public transport.

And this positively impacts the environment. Research shows that carbon emissions have fallen 33% since 2005. And 13% of that’s estimated to be down to more use of public transport.

Time to rethink office parking

Adding a workplace parking tax to parking space rental prices — which already stands between €100 and €250 per month — makes them a significant expenditure for most businesses.

On top of that, employee car park management can also include security, clearing debris, and painting over lines. But this expense can be avoided by encouraging a change in employee travel habits.

Prepare for parking taxes ahead of time

Taxing workplace parking spaces has proven successful in Nottingham. Air quality has improved, public transport gets more investment, and commuters are turning to alternative forms of transportation.

The success of this scheme will no doubt inspire more governments and councils across Europe to introduce workplace parking taxes.

Rather than waiting for news of a parking tax, businesses need to be proactive.

Encouraging employees to turn to private vehicle alternatives will make adjusting easier if you become subject to workplace parking taxes. And a sustainable mobility plan can help you to achieve this.

Active travel is often encouraged as the best alternative to driving to work. And there’s a lot of truth in that because it:

Improves air quality;
Is more cost-effective;
Is better for physical and mental health.

But walking or riding a bike to the office isn’t possible for everyone. In those cases, employers should support their team in making the greenest choice.

And that’s where Bolt Business can help.

Get your team to the office with Bolt Business

Bolt Business gives your team efficient, safe, and reliable alternatives to driving to work.

Employees can get picked up by one of our approved drivers — who drive a range of vehicles, including electric and premium models. All European trips are carbon-neutral, no matter the type of vehicle, as we offset the emissions.

By helping your team move away from driving to work, you can commit less space to parking and avoid future workplace parking taxes.

Find out how you can make that happen in the complete guide to Bolt Business.

Affordable work rides, without the paperwork