Thursday, 27 June 2013

Where is the missing £20 million in ParkingEye's accounts?

ParkingEye are a parking company. An interested party sent me a copy of their 2012 accounts.

The Parking Prankster is especially concerned with the entry in their Balance Sheet marked 'Debtors'. As might be expected, debtors are people or companies that owe ParkingEye money.

As you can see, ParkingEye were owed £1.9 million. This is further explained in note 8 to the accounts.

So, we can see that Debtors have been broken down into several categories. One category of people who owe people money are those who have been sent Parking Charge Notices (PCNs) and have not paid them. There may be some disagreement about this. Many people think these unsolicited invoices are scams and that Parking Companies have no legal right to enforce them - including the BBC Watchdog program. No doubt ParkingEye, however misinformed they might be,  almost certainly do not regard them as scams - otherwise why do they keep sending out those begging letters? In the case of the accounts, it is ParkingEye's opinon which matters.

The Prankster is therefore wondering which category these unpaid PCNs come under. It is almost certainly not 'Director's current accounts' or 'Deferred taxation'. 'Trade debtors' and 'Prepayments and accrued income' do not seem to fit either, but let us be generous and pick the bigger one, 'Prepayments and accrued income'. This gives a maximum of £1,093,670 owed for unpaid PCNs.

The trouble is, this does not seem to add up.

We can estimate the minimum number of PCNs ParkingEye send out each year from figures released by the DVLA saying how many enquiries each parking operator has made. This gives an approximate figure of 600,000.

We can estimate the number of unpaid PCNs from figures released by the British Parking Association Ltd. They say approximately 40% of PCNs go unpaid. That would be 240,000 in ParkingEye's case.

ParkingEye's PCNs vary from around £85 to £100. Let's use the £85 amount. That means that ParkingEye think they are owed £85 * 240,000 = £20,400,000. Let's round that down to £20 million, for convenience!

The question that is puzzling The Parking Prankster is, where is that £20 million in the accounts? It doesn't seem to be in the 'Debtors' column which is where the Prankster would expect to find it.

It shouldn't be a mystical smokey amount which only crystallises on the books if it is actually paid. ParkingEye have argued in POPLA cases that the charges are for parking services. Therefore, in their own opinion, the charge occurs at the point of service and should immediately appear on their books. As they think it is a service, they should also be immediately paying 20% VAT on that amount.

The Prankster is mystified; he does not seem to be able to track the £20 million down!

Perhaps it is written off? Surely if that were to happen for such a large amount, there would be some kind of note in the account from the auditors, Moore and Smalley LP, and their employee, Damien Walmsley? The Parking Prankster does not seem to be able to find it though.

It seems that ParkingEye themselves do not view these amounts as written off. They are current filing around 2,000 county court claims a month for unpaid PCNs, and they have the right to pursue claims for up to 6 years. If these amounts are not written off, where are they in the accounts?

Well, The Prankster is not an auditor, and the auditors do seem to have signed off the accounts, so no doubt all is well.

The Prankster is still baffled though, so if there are any accountants reading this blog who can explain where the £20 million has disappeared to, The Prankster would be grateful if they would get in touch so he can update this page. ParkingEye's accounts can be downloaded here.

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