The Workplace Parking Levy (WPL) could see motorists in Scotland who drive to work having to pay hundreds of pounds a year for a parking space. The new Levy is part of the Transport Bill, which is expected to be passed by the Scottish Parliament on Thursday.

Environmental groups believe the initiative will help reduce congestion and air pollution by encouraging motorists to walk, cycle or take public transport to work, as well as raising money for local services. But opponents say it will simply hit businesses and workers in the pocket.

As part of its budget agreement with the Greens, the minority SNP government pledged to allow councils to introduce a WPL if they want to do so.

It would not be a national scheme and local authorities would be free to decide whether to introduce a levy and how to manage it. If they did introduce it, it would see employers pay an annual levy to the council for every parking space they provide for employees. Employers could then choose whether to pass on the cost to their staff.

Calls for a tax on workplace parking in Scotland have largely been inspired by a scheme that was introduced in Nottingham in 2012 as part of efforts to reduce traffic congestion in the city. The Nottingham model sees employers who provide more than ten parking spaces for their staff pay about £415 every year to the city council for each space, with the charge increasing each year in line with inflation.

Staff parking at hospitals and other NHS premises are exempt from the charge, as are disabled parking spaces and frontline emergency services such as the ambulance, police and fire services.

It has been predicted that the improvements will take the equivalent of 2.5 million car journeys off the city's roads each year, cutting pollution and carbon emissions as well as reducing travel times for people who do still use their cars.