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Nottingham has become the first city in the UK to try to tackle congestion by taxing businesses with 11 or more car parking spaces.

The Workplace Parking Levy will see firms charged £288 plus VAT per space, every year.

"It's going to cost us initially £9,000 a year moving up to £13,000-£14,000 over the next three years," said Steve Butler, chairman of software company InspHire, which has 29 spaces.

"We're really angry about it, this is a business tax, a tax on employment and if we could move our business tomorrow, say, to Derby, we would."

As well as smaller firms, Nottingham's biggest employers like Boots, E.ON, Experian and its universities will also face the charges.

Nottingham City Council estimates that about a quarter of the 38,000 spaces it can tax in the city are owned by the largest employers. Companies will have to decide whether to absorb the costs themselves, or make their workers pay.

The tax is expected to raise around £14m a year for the city. The council is promising to spend the revenue on more trams and upgrades to other forms of public transport.

"I hope that through building great public transport we'll be able to contain congestion because the predictions we have is that congestion is likely to increase considerably and that is bad for Nottingham's economy," said councillor Jane Urquhart.

"It costs us £160m already and we don't want that getting any higher ... it gives people a very small financial incentive to change their behaviour."

But some business leaders think the strategy is a gamble - Nottingham Chamber of Commerce has opposed the plan for the past eight years.

"Some businesses are choosing to relocate outside the city boundary," said chairman George Cowcher.

"But we're also seeing a repetitional issue arising with inward investors saying: 'Oh, you're the high tax city aren't you?' That's not the image we want to give."

Whatever the impact of the new tax, other cities will be watching closely.

Bristol, Milton Keynes and Edinburgh are all considering how it could work for them.


Sky


Surely they should be trying to help UK businesses in such a poor economic climate? What if businesses pass this on to their employees? High rents have driven shops out of city centres, why would this not happen with businesses? This will just push more people onto already inadequate public transport systems. They should give people a fully working alternative before they start dishing out more taxes. Just another way for them to rake in more money.