HM Revenue & Customs has set the deadline of March 31, 2009, for dealers' submissions of claims for overpaid VAT on demonstrators.

"At a time when dealers are experiencing increasing pressure on cashflow, the refunds received from these claims can make an enormous difference," said David Kendrick of motor trade accountants Trevor Jones.

Kendrick said there is still a considerable number of new claimants, particularly individuals who operated franchised dealerships between 1973 and 1996 but who had disposed of the business to retire, or had it dissolved.

"The turnaround of the current claims appears to be quicker and the settlements are being agreed in a more timely manner which is great news for dealers," Kendrick added.