But tax changes could make extended warranties even less of a good buy. The 1996 Budget saw the Insurance Premium Tax on extended warranties increase to 17.5 per cent.
Most warranties are insurance policies, although some are maintenance contracts.
These are subject to VAT at 17.5 per cent, but this can be reclaimed on repairs and other expenditures by the companies which operate them. The Director General is asking the British Retail Consortium, which coordinated the preparation of the code of practice, to revise it to ensure that consumers paying in advance for uninsured maintenance contracts receive adequate protection. Fair Trading Magazine Fair Trading News Summer 1997 MMC to probe film processing merger Plans for a merger between two motion picture film processing and printing companies will be investigated by the MMC following OFT advice. Former Minister for Corporate and Consumer Affairs John Taylor agreed with the Director General that the proposed acquisition by Technicolor Ltd of Metrocolor London Ltd raises competition concerns. The MMC is required to submit its report by 25 June.