VATGPB4770 | Section 33 bodies: cars: accessories modifications repairs and maintenance

Inevitably cars used by public bodies will require to be maintained, repaired or sometimes modified. Some bodies also meet, fully or in part, similar costs for the private cars of their employees.

If a car is used for official business purposes and a body meets the cost of repairs or maintenance, it can recover any VAT that it pays despite there being substantial private use. For repair costs incurred on an employee’s private car, the body must hold sufficient evidence of payments made, work done and official business use of the car in question.

The recoverability of VAT incurred on a change made to a car after delivery is dependent on why the change was made. If the primary motive is not for official business purposes the VAT is not recoverable. But if it is for official business purposes’, but there is also a significant personal benefit (for example the fitting of an expensive entertainments system to include a radio to receive traffic alerts) the VAT is to be apportioned to take account of private use.