The Scrappage scheme has launched today, but some carmakers are refusing to allow deliveries due to a wrange over tax.

Carmakers are not happy that HM Revenue & Customs' guidance to was that the discount should be applied to the VAT-inclusive cost of the car, which in effect reduces the Government's £1,000 contribution to £870 due to the tax it collects.

The Society of Motor Manufacturers and Traders (SMMT) last night stated that "the vast majority" of the 39 car companies signed up for the scheme would not be able to deliver cars to their customers at its start.

Discussions are continuing to resolve the issue.

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