Ford and Honda have confirmed they will participate in scrappage as planned.
The companies had suspended their plans to be involved in the scheme when it was launched yesterday, as they sought clarification over VAT payments.
However, following a meeting with the Department for Business, Enterprise and Regulatory Reform (BERR), which is administering the scheme on behalf of the government, Ford and Honda have confirmed that they are now happy to take registrations and deliver cars under the scheme.
A letter was sent out by BERR at 11.30 last night to confirm that dealers and manufacturers can split the incentive between them, and must negotiate how it is divided. The VAT would be covered by the manufacturer.
Nigel Sharp, Ford Britain managing director, said: "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.
"Ford's substantial backing of subsidised vehicle scrapping helps to secure the 100,000 auto industry jobs in the UK dependant on our company, dealerships and suppliers."
Ford says it has taken over 3000 extra orders from first-time customers in the new car market, because of the Government's vehicle scrappage scheme.
The SMMT said it was pleased the final details regarding scrappage have been resolved and the scheme has been given the full backing of car manufacturers. SMMT chief executive Paul Everitt said: “The scrappage incentive scheme has the full support of the UK motor industry, who will continue to work with government to ensure the scheme’s success.