ivan burit
Joined: 26 Dec 2006
Posts: 2571
Location: YO HO - HO, welcome to Sunny Jaywick..
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 Posted: Sat Oct 17, 2009 8:10 am Post subject: Environmental car scrappage scheme winners, but who? |
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The Government's car scrappage incentive scheme offering £2000 towards the cost of a new car to owners of 10-year-old bangers was launched in May earlier this year.
There was mixed opinion about the scheme's effectiveness, as you'll see if you read the comments from other post`s elsewhere about car scrappage,
but now, 4 months on, figures reveal that someone is certainly enjoying success.
According to the latest figures, what the Government makes in VAT on a scrappage deal is greater than the £1,000 subsidy it gives to the owner.
With VAT currently at 15%, the Treasury is in profit whenever a scrappage customer pays more than £7,600 for a car including tax.
This means the Treasury is on course to net £405m in VAT receipts, £105m more than is being invested in the scheme, if the government ceiling of 300,000 deals is reached.
Therefore the Government is set to make at least £100 million profit More than 200,000 cars have been sold under the scheme and ministers are being called on to extend the scheme.
Not a bad idea considering and increase in VAT is scheduled for January 1, 2010 - good news for the government, bad news for car manufacturers.
The manufacturers didn't do too badly out of the deal either considering there has been a 20% increase in car sales.
So does that mean the only one that's losing out would be the taxpayer?
Leave a comment and share your thoughts.
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