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Budget smallprint hands bodyshops and repairers courtesy car tax relief

Bodyshops and garages with courtesy car fleets have been given an unexpected lift by new tax-busting measures available on small carbon dioxide efficient models. An unpublicised section of Chancellor of the Exchequer Gordon Brown's Budget in April revealed that companies purchasing cars with CO2 emissions of not more than 120g/km will be able to offset the full cost of the vehicle in the first year against profits.

Brown also removed the £12,000 upper threshold from the special capital allowances rules, opening the market to a wider choice of models with top specifications. The scheme will be in force until March 31, 2008.

For bodyshops and repair outlets, it means they can write off the full expense of purchasing eligible cars for their courtesy fleets, which is a massive drain on resources. Previously the write-off figure was 25 per cent of the cost.

Around 15 models meet the new emissions threshold, including the VW Lupo 1.7 SDI (119g/km), Peugeot 206 1.4 HDi (112g/km), Ford Fiesta 1.4 TDCi (113g/km) and Audi A2 1.4-litre TDi (116g/km).

“Purchasing one of these low emission cars will be highly beneficial to bodyshops and garages,” says Charles O'Shea, general manager of finance at Suzuki GB, whose Suzuki Alto, on sale from September, is also eligible. “Now they will be able to offset every penny of the purchase price, including accessories within the first year.”

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