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Scrappage incentive scheme successful

According to the Society of Motor Manufacturers and Traders (SMMT) 29,796 vehicles have been registered under the scrappage scheme since it started on 18 May 2009. This accounted for 9.7% of June’s new car registrations a total of 17,014 units. In addition to cars 323 vans were also registered in June under the scheme (1.9% of van registrations).

Paul Everitt, SMMT chief executive said:

“The scrappage incentive scheme is working well and has encouraged a lot more people back into showrooms. In the coming months, we will see an increase in the rate of deliveries and this will confirm further progress on the industry’s long road to recovery.”

The vehicle scrappage scheme is a voluntary scheme for motor dealers. Participating dealers will give buyers a £2,000 discount off the purchase price of a new car (or small van) in exchange for scrapping their old qualifying vehicle which must, amongst other criteria, have been registered on or before 31 August 1999.

The scheme is expected to run until March 2010, unless funds are exhausted before then. For general information on the £2,000 scrappage discounts and the qualifying conditions for vehicles visit the Directgov link below. For HMRC’s views on the business tax and VAT implications of the car and van scrappage scheme use the HMRC link below.

If you have any queries on the tax implications of the scheme please do get in touch.

Internet links: SMMT article Directgov website  HMRC Brief

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