Tax: details of scrappage scheme 2009-2010 – UPDATED

In his Budget statement to the House of Commons on 22 April 2009, Chancellor of the Exchequer Alistair Darling confirmed that a scrappage incentive scheme will be introduced. This has subsequently been updated by Business Secretary Lord Mandelson on 28 September 2009.

• A total of £2,000 will be offered in a “cash-for-scrap” scheme for eight-year-old, or older, vans (previously 10-year-old). For cars to qualify they must be 10 years old.
• The £2,000 saving will be made up of £1,000 from the government and £1,000 from the relevant car or van manufacturer.
• Participation in the scrappage scheme by specific car or van manufacturers is voluntary.
• The funding will be made up of £400million (previously £300million) from the government – a figure that will be matched by the manufacturers participating in the scheme.
• The scheme was introduced in mid-May.
• The scheme will run until February 2010 (previously March 2010), or until all of the government funding has been used.
• The discount will be offered to consumers buying a new vehicle to replace a vehicle which they have owned for more than 12 months.
• The registered keeper must have a UK address.
• Eligible vans must have been first registered in the UK on or before 28 February 2002 and have a current MOT test certificate.
• Scrappage savings apply to commercial vans (up to 3.5 tonnes) as well as cars.
• The scheme will be audited by the DVLA.
• Scrappage trade-ins can only be made against new cars or vans.

The van scrappage scheme is voluntary so not all manufacturers or dealers may participate. Dealers will do all the paperwork for van drivers participating in the scheme. And arrange for the old vehicle to be scrapped. The dealer will check that the vehicle being traded in – and the new one being bought – qualify under the scheme. In a statement, the Department for Business, Enterprise and Regulatory Reform, said: “The decision to implement a scrappage scheme has been taken after careful consideration of car industry proposals, lessons learnt from European schemes as well as concerns raised about the impact of such a scheme on other sectors of the economy. “The UK scheme is intended to provide immediate support on a short-term basis to boost the car industry and its supply chain in the wake of falling sales. It will also get older vehicles off the road and encourage consumers to invest in new, safer, and potentially more environmentally friendly models.”