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RMI attacks VAT

Body repairers have praised Retail Motor Industry Federation president John Bond-Smith for highlighting their plight at the association's annual dinner.

He criticised the Government for allowing insurers to “exploit a VAT loophole” on accident repairs carried out at their own bodyshops.

Insurers like Direct Line, Churchill and Royal & SunAlliance do not pay VAT on labour at their own facilities because staff are employees. As labour accounts for about 40% of the repair cost, it saves them around 8%. “The Chancellor's support of this iniquitous tax advantage provides a green light for other insurers to open their own repair centres as a method of suppressing the market,” said Mr Bond-Smith.

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