The Government's controversial car scrappage scheme (bangers for cash), has hit another hurdle courtesy of the HMRC "guidance note" about the scheme.
The car industry claim that the note had "muddied the waters".
A Honda spokesman was quoted in The Times:
"We have asked our dealers to hold off registering vehicles. We want to see clarity with this issue of VAT and how the industry contribution is to be managed.
The document sent out last week from the Revenue was quite a confusing document. This is what we are seeking clarification on."
Another example of a poorly thought out government "initiative" adding to the complexity of the already massively overcomplex tax legislation.
However, as noted before on this site, Brown doesn't do "simple".
As to whether encouraging people to scrap old cars and buy new ones (many of which may well be foreign imports) actually improves the economy or environment, is of course another issue!
Tax does have to be taxing.
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Does anyone know exactly what the manufacturers feel is unclear about the Revenue & Customs Brief (contrary to the reporting, it doesn't appear to be a "Guidance Note")? After a bit of Googling I've been unable to dig up any more detailed explanation of the problem. I'm sure this couldn't possibly be just the car industry maneouvering to get themselves a better deal...
ReplyDeleteAnd Ken, leaving aside the fact that the scrappage scheme hasn't actually involved the introduction of any tax legislation, you've once again omitted to set out any constructive suggestions for how the "massively overcomplicated tax legislation" should be simplified. What do you have in mind?
(On a more cordial note, I agree with your misgivings over whether the scrappage scheme is a good idea environmentally, etc. At least it shouldn't cost the public purse too much, though - a new car only needs to cost more than about £7000 before the VAT on its purchase alone matches the government subsidy.)
If this stupid scheme actually works, I'll eat my shoe!
ReplyDeleteThe trouble with deciding whether or not it works is that it's not really measurable. Even if there's a pick-up in new car sales, it's very difficult if not impossible to say whether it's because of this or any other scheme or just because of the upswing in the economy.
ReplyDeleteYou're probably therefore safe from ever having to eat your shoe, Baby, as there's no way that there's no way that there'll ever be agreement over whether it's worked.