It used to be that if you overpaid on your parking meter in Portsmouth you got the minutes you paid for.
But now the city council has changed the rules and if you don’t have the right change it’s unlucky – and the authority keeps the change.
The move, which was brought in this month, will make the authority an extra £30,000 a year.
Previously, overpayments translated into extra parking minutes as it was not in the council’s interest to take the extra money as it would have had to pay VAT on it.
But a recent change in the law removed the VAT rule, meaning it can keep the cash.
Cllr Luke Stubbs, deputy conservative group leader, said the council might as well have put charges up instead.
He said clear signs need to be put up so drivers know what to expect.
‘Coins are bulky and many people only carry a small supply with them,’ he said.
‘To just treat any overpayment made as a free gift to the council is unfair. Frankly I’d sooner the administration just raised charges. At least that would be honest and transparent.’
‘Many of us have been overcharged in this way elsewhere in the country and it leaves a bad taste in the mouth when it happens.
‘At a minimum the council must put clear signs on the machines so people know what to expect.’
It comes after statistics revealed the council made £1.98m in parking charges and fines between 2011/12, compared with £1.7m the year before.
Local authorities across the UK are making a combined £635m profit.
Cllr John Ferrett, Labour group leader, said it could have a big impact on visitors coming to the city.
‘The council has to be careful that it isn’t deterring people from visiting the city and visiting shopping areas,’ he said.
‘Something like that, which is going to raise a relatively small amount of extra revenue, could have a big impact.’
Council parking manager Michael Robinson said drivers can pay exact amounts using their card or phone.
‘We advise visitors to have the correct money available as like many places our machines do not give change, but you can pay the exact amount by card or even mobile phone,’ he said.
‘A change in the law means VAT is no longer applied to overpayments, so if people do pay more than the tariff then that would generate funds for the council.
‘This applies across the country to the many machines which do not give change.
‘Our machines now only issue tickets for the hours set, overpayments no longer convert into more time.’
VAT RULES BEHIND DECISION TO KEEP THE CHANGE...
THE change in VAT rules comes after King’s Lynn and West Norfolk Borough Council won a tribunal against HMRC.
The case rules that overpaid tickets should not be liable to VAT because they should be treated as tips to the council rather than payments for parking.
The move by Portsmouth City Council is not something that’s been taken up by all other local authorities in the area.
Havant Borough Council and East Hampshire District Council’s parking machines are set up so motorists get extra time on tickets if they overpay the going hourly rate.
A spokeswoman for Gosport Borough Council said it’s aware of the changes and a decision needs to be made as whether to follow suit. Fareham Borough Council’s town centre pay-and-display machines don’t give change or extra time.