News
Vehicle Scrapping VAT Problems
23 May, 2009
The motor industry, including major manufacturers like Honda, Ford and Fiat, were confused by a document issued by HMRC with regard to VAT on the scrapping of vehicles and they called for clarification.
However, the dispute between car makers and the government over the UK car scrapping scheme have now all been resolved. Ford is apparently putting its full weight behind the scheme. MD Nigel Sharp (Ford Britain) said that it would not only boost sales but would also bring positive employment and environmental benefits.
Owners of cars and small vehicles more than 10 years old will get a £2,000 reduction on the price of a new vehicle when scrapping the old one. Half this amount will come from the car manufacturer and the other will be supplied by the Government. However, the Government will levy 15% VAT on the price of the new vehicle before the reduction is made.
Lord Mandelson - Business Secretary - is standing by the scheme. He was quoted as saying that the scheme had been met with a flood of enquiries from customers, and that it would provide a boost to the industry and kick-start sales.
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