Car scrapping scheme for the United Kingdom

Archiv – UK chancellor of the exchequer Alistair Darling unveiled a list of new measures on Wednesday (22 April) as part of the government’s budget designed to simultaneously claw back taxes and boost the economy. One of the budget’s headline features is a new £2,000 (‘‚¬2,227) car-scrapping scheme available to citizens who trade in cars over 10 years old and purchase new ones. United Kingdom | UK chancellor of the exchequer Alistair Darling unveiled a list of new measures on Wednesday (22 April) as part of the government’s budget designed to simultaneously claw back taxes and boost the economy. One of the budget’s headline features is a new £2,000 (‘‚¬2,227) car-scrapping scheme available to citizens who trade in cars over 10 years old and purchase new ones.
As the companies manufacturing cars in the UK – whose parent firms are all based abroad – have agreed to share the burden by paying half the cost, the government’s offer is less generous than it seems.
The government has set aside £300 million to pay for its part of the scheme, but it will only cost it £1,000 per car sold, and in the end the scheme could potentially bring in more than that in added VAT revenues.
A similar scheme was recently introduced in Germany. It resulted in a 40% rise in car sales last month – in sharp contrast to the UK where sales slumped more than 30% compared with a year earlier – so carmakers and dealers have high hopes that the impact will be similarly dramatic in the UK.
Until now, Germany was the only EU member state to report a rise in car registrations in February, as German citizens rushed to avail themselves of the new offer. Despite calls by the Czech presidency in February for a “European car fleet renewal,” so far car-scrapping schemes have been implemented in a number of EU member states on a purely national basis.