Published 11/09/2014 00:00:00 in Press Releases

The National Association of Bodyshops (NAB) has approached HMRC to clarify responsibility for paying VAT on accident damage repairs to courtesy cars that have been provided by garages.

Frank Harvey, Head of NAB, comments, “It appears that there is some confusion as to liability for the VAT content on courtesy car repairs.

“Some insurers are asking our members to pay the VAT element of the repair invoice where a courtesy car has been covered under a customer’s own insurance policy, so we asked HMRC for clarification”

After reviewing HMRC’s response, NAB has provided the following guidance to bodyshops:

Harvey comments, ‘Where the damage is covered by a policyholder’s own insurance policy and the policyholder is VAT registered, the policyholder is directly responsible for paying the VAT element of the repair invoice together with any excess, usually directly to the garage.

‘Where the damage is covered by a policyholder’s own insurance policy and the policy holder is not VAT registered, the invoice, less any excess, should be settled by the insurer covering the claim, including the VAT element.

‘Where the damage is covered on a repairer’s motor trade policy and the repairer is VAT registered, the repairer is responsible for the VAT element of the invoice and the customer is responsible for any excess.'

Following our communications with HMRC, NAB approached the Association of British Insurers (ABI), as the insurer’s representative body, and we are currently awaiting comment.

Any NAB member experiencing issues, especially unreasonable pressure for the repairer to not charge the insurer the VAT content, or any other matter relating to the interpretation of VAT for body repairs are invited to contact Frank Harvey on 0845 305 4230.




Katy Recina, Press Officer
Tel:020 7307 3422
Press Office direct line: 020 7307 3422
Press Office fax: 020 7307 3406

Web:  Email:

The Retail Motor Industry represents the interests of operators in England, Wales, Northern Ireland and the Isle of Man providing sales and services to motorists and businesses. The RMI has a formal association with the independent Scottish Motor Trade Association which represents the retail motor industry in Scotland.

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