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.