Car Srappage scheme started 18th May 2009
June 2009
In exchange for scrapping your old vehicle and buying a new one the Government and most car manufacturers will contribute a total of £2,000 towards the purchase of a new vehicle - the scheme will run from 18 May 2009
The scheme will be available to the first 300,000 eligible claimants or until 28 February 2010, whichever is sooner.
To qualify the vehicle you are trading in must:
- Be a car or small van weighing up to 3,500 kilograms (kg)
- Have been first registered in the UK on or before 31 August 1999
- Either have a current tax disc, or have a current tax disc and a current Hackney Carriage Licence, or an MOT certificate which expired no earlier than 14 days before the date of the contract between the Purchaser and the Dealer for the acquisition of title to the vehicle by the Purchaser
- Have been registered to you continuously for 12 calendar months before the order date of the new vehicle
- Have a UK address on the registration certificate (V5C) in the same name as the new vehicle
- Have a current MOT test certificate before date of order for the new vehicle
The new vehicle you want to buy must be:
- A car or small van weighing up to 3,500 kg
- First registered in the UK on or after 18 May 2009
- Declared new at first registration in the UK with no former keepers
The allowance is funded by a £1,000 subsidy from the Department for Business, Enterprise and Regulatory Reform (BERR) and a further £1,000 discount paid for by the manufacturer.
In most cases, VAT cannot be reclaimed on a car purchase even by VAT registered businesses so the discount will only have the effect of reducing the car's purchase price. However, certain VAT registered customers may have to reduce their input tax in respect of the manufacturers' discount. This will only be the case where VAT can be reclaimed on the purchase of a car such as for the purchase of a taxi or a driving instructor's car.
If you are buying a business vehicle under this scheme please note the following points regarding a future claim for capital allowances.
1. The £2000 discount reduces the capital cost of the vehicle.
2. The vehicle you part exchange, or scrap, is considered to be written off for tax purposes and the £2000 discount will not be treated as taxable proceeds of sale.
