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Dealers urged to chase VAT reclaim

Dealers are missing out on an opportunity to reclaim thousands of pounds of VAT on demonstrator vehicles.

The warning comes from Stockport-based chartered accountants Trevor Jones and Company, which says it has helped more than 100 franchised dealers in the UK reclaim more than £1m on the VAT from demonstrators they have sold.

The opportunity has arisen due to a European Court decision in 1997, known as the Italian Republic Case, which allowed dealers to reclaim overpaid VAT on profit margins and bonuses.

Liz Gallagher, Trevor Jones' tax and audit practice manager, said: “Whilst most motor dealers are aware of this opportunity and have made claims, there are still a few dealers who may well miss out.”

The dealers which made successful claims represented the majority of franchises including Suzuki, Rover, Mazda, Mercedes, Seat and Skoda. Claims were recorded between £5,000 and £25,000m, with the largest single sum totalling £44,665.

Time is running out for claims to be submitted. Customs & Excise have put a three-year cap on when claims can be submitted, from the date the law change was introduced in December 1999.

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