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RMI urges Government to close VAT loophole

The vehicle body repair industry has asked the Government to investigate a VAT loophole it claims is being exploited by insurance companies that operate their own vehicle accident repair centres.

In a series of parliamentary questions in the House of Commons the RMI is highlighting the fact that insurer-owned bodyshops do not have to pay VAT on the labour because the work is being conducted in-house.

The VAT issue is a major element of the Body Repair Industry Campaign being run by the RMI. Bob Hood, director of the RMI's bodyshops services division, said: "A statement in the trade press at the beginning of March confirmed our assertion that those insurers who open their own shops, in direct competition to 'commercial' operations, consider the VAT advantage to be extremely important."

The RMI campaign highlights the fact that the presence of insurer-owned bodyshops may disadvantage other bodyshops and smaller insurers that do not have the necessary capital to fund a body repair operation.

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