The Vehicle Scrappage Scheme is a voluntary scheme for motor dealers under which participating dealers give buyers a £2,000 discount off the purchase price of a new car (or certain types of small van) in exchange for scrapping their old qualifying vehicle.
Funded jointly by the government and manufacturers, the scheme has proved very popular. Although the scheme is set to run until February 2010, recent figures show that approximately 80% of the available budget for the scheme has already been utilised. As the scheme enters its final stages the Department for Business will allocate order quotas to manufacturers based on brand popularity and it is hoped it will help to ensure a smooth closing of the scheme.
Lord Mandelson, Business Secretary, said:
"I'm pleased to see that the scheme has been taken up by so many people, supporting our automotive manufacturers through a very difficult time. With limited orders as we near the close of scrappage there is a risk of disappointment for car buyers. I would urge people who are still keen on taking part to put their orders in as soon as possible as time is running out."
For general information on the £2,000 scrappage discounts and other conditions visit the scrappage website 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: BIS press release Scrappage website HMRC Brief