Scrap VED refund change RMIF tells government

Changes to Vehicle Excise Duty (VED) coming into force on 1 January 2009 will have a negative effect on car dealer cash flow, with a resulting impact on business viability, and additional expense for consumers warns the Retail Motor Industry Federation (RMIF).

From 1 January 2009, dealers will be prevented from applying for VED refunds on vehicles that they have taken in part exchange. The rules have been changed so that only registered keepers of vehicles may apply for refunds. As dealers rarely become the registered keeper they will be unable to obtain a refund. This change will cost the industry £70-80 million per year, and dealers will only be able to recover the shortfall through staff cuts.

RMIF Chairman Paul Williams commented: ‘The timing of the introduction of the new rules could not be worse. The new VED refund rules will remove a major income stream from dealers when they can least afford it.’

The issue was raised by Paul Williams when speaking to Lord Mandelson, Secretary of State for Business, Enterprise, and Regulatory Reform, in a meeting on 28 November.

‘The RMIF has and is continuing to follow this up with meetings with a number of other figures in Government, and is campaigning to have the change abolished, or at least deferred until the economic situation improves,’ said Williams.

Williams adds: ‘All dealers must will be affected by this, and we will continue to communicate to Government how damaging the move could be, especially at this time.’