VAT arguement delays implementation
18 May 2009

Ford and Honda have confirmed they will participate in scrappage, but have admitted they will not be able to take registrations for any cars sold under the scheme today.

The scrappage scheme, which was officially launched today, has been the subject of much debate between the government and car manufacturers since it was announced last month.

Read about the scrappage scheme's launch here

Late last week details of the scheme were still being debated, and as a result of a row over whether manufacturers can split their £1000 subsidy and VAT payments with their dealers, Ford and Honda have delayed their participation in the scheme.

Autocar understands that the Department for Business, Enterprise and Regulatory Reform, which is administering the scheme for the government, held a conference call with disaffected manufacturers on Monday afternoon, and a compromise is expected to be met by Tuesday.

Ford says it will not be able deliver the first cars sold 'for a few days'.

A spokesman said: '"We have 550 dealers to get contracts out to and back from, and with the finer details being finalised so late, and the amount of paperwork required to secure £1000 of public money, we have had to delay things a little. But Ford is as committed to the scheme as ever, and this situation will be resolved quickly."

A Honda spokesman said: "We are in scrappage, and optimistic we will be able to take registrations very shortly. It is just some points of detail that we are seeking to clarify. We are expecting a workable solution to be agreed with BERR imminently."

Additionally, a Ford statement read: "Ford has been part of negotiations between the Government and all vehicle manufacturers on the vehicle scrappage scheme announced in last month's Budget. As a significant employer and investor in the UK, Ford remains committed to this scheme to stimulate sales within the sector and help protect jobs.

"Based on details which only became apparent late in these negotiations, Ford is working to resolve some outstanding administrative issues but is confident it will begin vehicle deliveries within a few days of the official start date.

"Detailed information on the scrappage scheme was not included in the Budget. However, Ford as leader of the UK vehicle market welcomed it on behalf of customers, industry employees and also for its safety and environmental benefits.

"All manufacturers planning to participate in the scheme have been looking at the precise mechanism for funding their £1000 contribution towards the total £2"000 incentive offered in return for trading in a 10+ year-old vehicle, and discussions with BERR have been ongoing since the Budget."

Reports had suggested Fiat was in a similar situation, but a spokesman said: "We are in the scheme and we are participating as planned and without any problems."

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