The Vehicle Scrappage Scheme is a voluntary scheme for motor dealers under which participating dealers give buyers a £2,000 discount off the purchase price of a new car (or certain types of small van) in exchange for scrapping their old qualifying vehicle.Funded by the government and manufacturers the scheme has proved very popular and according to the Department for Business Innovation and Skills (BIS) website 260,226 cars have now been scrapped under the scheme, which is set to run until February 2010. An extra 100,000 (£100 million) has been added to the number of scrappage deals that the government will fund, taking it to 400,000 in total. In a change to the qualifying conditions, the age of the vehicle has also been adjusted to first registered on or before 29 February 2000 for cars or 28 February 2002 for vans. For general information on the £2,000 scrappage discounts and other conditions visit the BIS website link below. For HMRC’s views on the business tax and VAT implications of the car and van scrappage scheme use the HMRC link below. If you have any queries on the tax implications of the scheme please do get in touch.