A situation in which an employer pays, or reimburses, a parking fine which is the employee's liability should be dealt with as above. The fine will be the employee's liability if the penalty notice was actually handed to him or her at the time of the offence, or if the employee owns the car. In such circumstances a deduction may be allowed to the employer for the fine paid on behalf of the employee.
But if the notice was fixed to a car owned by the employer, and the employer pays the fine as the registered owner, an employment income charge will not arise to the employee. The fine should then be disallowed in computing the employer's taxable profit. If the employee voluntarily pays a fine in these circumstances, and the employer reimburses it, the employee will be chargeable on the emolument arising. A deduction for the expense may then be allowed to the employer.
