Budget
2009 - Initial Report
Chris Hunt Cooke has volunteered to provide our usual report
and analysis of the Budget 2009 presented by the Chancellor
this afternoon from a classic car enthusiast's viewpoint, but
as I know he is engaged on other motoring matters this evening,
my initial note is below. Victor
Smith (22.4.09) (The report
from CHC is alongside)
Fuel duty
This will go up by 2p/litre from 1st September 2009. The current
rate is 54.19p/litre. Further increases of 1p/litre in real
terms in both 2010 and 2011 were also announced.
VED
Rates for cars over 1549cc registered before 1st March 2001
will be £190 (2009/2010) plus £5 and £205
(2010/2011) plus a further £15!
Scrappage
scheme
As we have trailed for some months on the V8BB and in articles
on the V8 website, a scrappage scheme has been announced. Motorists
buying new cars from 18th May 2009 will get a £2,000 payment
(termed a discount) if they trade in a car for scrappage that
is 10 years old or more. That is a car first registered in the
UK on or before 31st July 1999 - that condition would be of
concern to an owner of a reimported RV8 in such a poor state
that it was offered for scrappage - heaven forbid! The scheme
runs to March 2010 or until the £300m allocated runs out!
Needless
to say a scrappage scheme has rules and on the DirectGov website
the initial indications of the scheme rules are:
1. Dealers selling new cars under the scheme have to join the
Vehicle Discount Scheme. No doubt the Lordly Mandleson's business
department will have many conditions for both qualifying for
and operating the system!
2. Cars being offered for the scrappage can be taxed or be on
a SORN but they have to have an MOT, presumably a current MOT!
3. Length of ownership of the car offered for scrappage. To
benefit from the scheme the new car buyer must have been the
registered keeper of the car that is being scrapped for at least
12 months.
This
third condition is one which will test the imagination of many
in devising schemes to take advantage of the scheme. It is clear
that many owners of cars eligible for scrappage who might normally
dispose of their old car and trade up to a good secondhand car
will not necessarilly be able to buy a new car whereas people
with a good secondhand car might naturally buy a new car, particularly
with the £2,000 inducement! So putting those two groups
together will see some imaginative schemes I am sure.
Of particular
interest to classic car enthusiasts is when a car has been accepted
for scrappage by a dealer who is a member of the Vehicle Discount
Scheme, what then happens to the vehicle when it goes for scrappage?
Can the useful spares be harvested before the residue is sent
off to the crusher? If that is possible then who will get the
Useful Scrap Value - the dealer or the owner of the old vehicle?
With some Condition 3 classic cars the useful scrap value could
be a tidy sum which a dealer would no doubt be happy to recover! |
Budget
2009 - Report
The VED
increase was announced in the 2008 pre-budget report and will
apply to tax discs bought from 1st May 2009. For pre-2001
cars of over 1.5 litres the new rate will be £190 for
12 months and £104.50 for 6 months. From 1st May 2010
the 12 month rate will be £205, and the 6 month rate
is not shown. Chris Hunt Cooke (23.4.09)
It seems that the Treasury failed actually to stop
the scrappage scheme, to which they have always been very
opposed, but have managed to emasculate it quite effectively.
As Bryan points out, £1,000 coming from the trade will
almost certainly be at the expense of the discount probably
available anyway. There may be a little mileage in the old
banger owner buying a new car with discount on behalf of someone
wanting a new car and immediately transferring it, but by
the time the effective £1000 has been shared between
the two of them, it is looking a bit marginal.
I have found some further information on the BERR (Department
for Business, Enterprise and Regulatory Reform) website as
below (note the concern to avoid abuse!):
Government
introduces incentive for motorists to 'scrap' old cars and
vans
Motorists are being offered £2,000 towards a new car
or van if they trade in their 10-year-old, or older, vehicle
for scrap under plans unveiled by the Government in today's
Budget. The decision to implement a scrappage scheme has been
taken after careful consideration of car industry proposals,
lessons learnt from European schemes as well as concerns raised
about the impact of such a scheme on other sectors of the
economy.
The UK scheme, with £300m from Government and matched
funding from industry, is intended to provide immediate support
on a short-term basis to boost the car industry and its supply
chain in the wake of falling sales. It will also get older
vehicles off the road and encourage consumers to invest in
new, safer, and potentially more environmentally friendly
models.
Business Secretary Lord Mandelson said: "This is targeted
action with a capped budget and for a limited time, designed
to boost the whole motor trade. This will ensure that the
benefits of a scrappage scheme are balanced with the needs
of other sectors of the car industry such as the second hand
market, maintenance and repair businesses, and other industries
that produce consumer durables or on the taxpayer.
"The car sector is under huge pressure at the moment
and the government is determined it remains a very important
part of our manufacturing base. It invests heavily in research
and development, supports highly skilled workers and a wider
supply chain. These are vital to our future manufacturing
and retail success."
The scheme will be run by automotive manufacturers who wish
to participate. It is expected to be operational from mid-May
to allow industry time to prepare. There will be proper verification
procedures to ensure the rules are followed, including audits
by DVLA to avoid abuse that has been encountered in other
countries.
Business Minister Ian Pearson said: "People will not
only save hard-earned cash on buying a new car or a van for
their business but they will know they are helping save jobs
too. "If you've got a vehicle that's ten years old or
more, you just need to talk to a participating dealer who
will do the rest. You will get at least £2,000 towards
a new one."
1. The £2,000
grant is made up of £1,000 from government with matched
funding from industry. The scheme will operate from mid-May
until March 2010 or until the government funding has been used.
2. It applies to commercial vans (up to 3.5 tonnes) as well
as cars that are 10 years old or older.
3. The scheme is a voluntary scheme so not all manufacturers
or dealers may participate.
4. How to apply
The dealers will do all the paperwork for motorists participating
in the scheme and arrange for the old vehicle to be scrapped.
The dealer will check that the vehicle being traded in and the
new one being bought qualify under the scheme:-
Old
vehicle
* Passenger car or small van up to 3.5 tonnes
* First registered in United Kingdom on or before 31 July 1999
* Currently registered with DVLA to the registered keeper making
the application, or currently on Statutory Off Road Notification
(SORN)
* Current MOT test certificate
* Registered Keeper must have a UK address
* The registered keeper has been the registered keeper of the
vehicle continuously for the preceding 12 calendar months before
the order date of the new vehicle.
New vehicle
* Passenger car or small van up to 3.5 tonnes
* First registered in the UK or after the date the scrappage
scheme is launched and declared new at first registration in
the UK with no former keepers
* UK specification vehicle
* Registered to the same registered keeper as the registered
keeper of the eligible vehicle to be scrapped. |