VAT problems sorted for car scrappage scheme

Concerns over VAT payments and the administration of the new car scrappage
scheme have abated, after its launch was plunged into chaos when Ford and Honda
held back dealers from registering new cars over the issues.

The scheme was announced in the Budget, with the government and motor
industry putting £1,000 each towards people trading in a car over ten years old
for a new vehicle.

But the major manufacturers were confused by a document issued by HM Revenue
& Customs, according to reports.

‘The document sent out last week from the Revenue was quite a confusing
document. This is what we are seeking clarification on,’ a spokesman for Honda
said at the time.

The issues were resolved today.

‘Ford is putting its full weight behind the UK vehicle scrappage scheme,
which will not only boost sales but will also bring positive employment and
environmental benefits too,’ said Ford Britain MD Nigel Sharp.

Further reading:

VAT confusion puts brakes on car
scrappage start

HMRC’s scrappage VAT guidance here

Related reading