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HMRC internal manual

VAT Government and Public Bodies

HM Revenue & Customs
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Government departments and health authorities: Contracted Out Services (COS) Headings: COS Heading 26 - Hire of vehicles, including repair and maintenance

This Heading allows recovery where a government department or NHS body enters into a contract for the supply of a vehicle/vehicles and the repair and maintenance of these vehicles by the supplier is specified in the contract.  HM Treasury view this as covering long-term car hire for a period of more than 30 consecutive days.



  • Contracts for the hire of pool cars, company cars or other vehicles where the contract includes repair and maintenance by the supplier



  • Hire of vehicles alone where the contract does not include repair and maintenance, however the VAT on the separate supply of repair and maintenance will be recoverable under Heading 37


Additional information

  • Where you have a contract which includes both the hire of vehicles for less than 30 days and hire for 30 days or more, you can only recover the VAT in relation to the 30 days or more hire