Main example is employee has an accident at work and is charged up to £1000 for damage to car. The repair would be done on site by other employees.
Not sure if the £1000 cap is relevant - could make it fall into compensation category rather than paying for repair.
The letter to the employee would detail cost for the repair including materials and labour and VAT would be added to the total amount. The deduction would be taken in installments from wages.
If there was no proof on who caused the damage, the vehicle would be repaired and no VAT would be charged until the vehicle is sold. However if the employee is paying for the damage VAT is charged, although nothing is actually supplied to the employee.
This is mainly for damage to cars for resale (sometimes not for resale and sometimes just for company property)