08 March 2010
Rumoured VAT rise could damage new vehicle sales
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Car chiefs fear a rumoured VAT rise later this year could further damage new vehicle sales just as the scrappage scheme comes to an end.
With the Government’s scrappage incentive scheme due to expire at the end of this month UK car companies are predicting new vehicle sales to fall by as much as 10% this year to between 1.7 and 1.8 million.
As well as the end of scrappage there are other issues which could come into play such as the new first year Vehicle Excise Duty rate on April 1, the possibility of a new government following this year’s general election and the rumoured hike in VAT from 17.5% to 20%.
A rise in VAT was the biggest concern with bosses at this week’s Geneva Motor Show, who said such a move could be ‘disastrous’ for business. New showroom-based VED taxes will hit high emission vehicles hardest but additional VAT will hit all big ticket items.
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