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Car insurance customers 'could lose out if MOTs qualified for VAT'

04/06/07

Car insurance customers could eventually be asked to pay more for car repair checks if the government decides to abolish a tax break for MOTs, an automotive group has warned.

According to Ray Holloway, director of independent membership at the Retail Motor Industry Federation, "there are suspicions that the government may be considering tampering with the statutory status of the MOT test".

If this reclassification did take place, Mr Holloway explained that MOT car repair tests would then become liable for VAT tax.

Consequently, it would mean that motorists who arrange a car repair check-up would find their MOT bills rising to take tax costs into account.

And the motoring federation has also given car insurance customers an indication of how soon the possible changes could take effect.

If the government decided to change the statutory status during the next MOT review, the body explained, it could potentially mean that motorists would incur tax on car repair tests from April 2008.

However, Mr Holloway has moved to reassure car insurance customers that it would challenge any governmental decision perceived to be a threat to the current MOT car repair system.

"We will be keeping a watchful eye on developments and will actively campaign against anything that would downgrade the status of the test or threaten the viability of thousands of garages," he affirmed.

Earlier this year, it was revealed that the government was planning to overhaul the existing MOT testing schedule, car insurance customers may remember.

Under the proposals, new cars would need to be given an MOT after four years instead of three.

Additionally, motorists would then need to check in their vehicle for an MOT every other year, instead of every 12 months.