Page last updated at 10:39 GMT, Friday, 6 February 2009

Workplace tax may force firms out

Workplace parking
The workplace parking levy may be in place within two years

Companies forced to pay a controversial parking charge may move out of Nottingham to other parts of the East Midlands, a business leader has warned.

The government is considering a charge for motorists who park at their place of work in Nottingham.

The city council said the move would cut congestion.

But David Frost, director general of the British Chambers of Commerce, said companies had told him they would leave Nottingham rather than pay the tax.

"They're saying 'we're mobile companies, we can move to other parts of the East Midlands and we will do that if this tax hits us'.

Decision imminent

"You're getting a tax in Nottingham which will hit business at the time it can least afford it.

"It will also hit their employees if they pass it on. Those companies might well say 'if we want to retain our good staff and continue in business, we'll simply move to somewhere else'."

The city council has submitted plans to charge firms up to 350 per car per year as a way of cutting congestion and funding public transport. A decision from transport secretary Geoff Hoon is imminent.

If approved the charge, which is planned to start at 185 and then rise in stages until 2014, could be in place within two years and would apply to companies with more than 10 parking spaces.

Mr Frost also said if other councils followed Nottingham's lead on introducing a tax on parking, it would cost the UK economy an estimated 3.4bn a year.

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