Mark a vehicle is only considered end of life once it is owned by the insurers and sold to the scrappys.

There is nothing to stop an individual breaking up their own vehicle (regardless of damage) in VOSA or DVLA eyes. Even in terms of waste disposal as long as the relevant fluids and toxic parts are disposed of correctly you can cut up the shell into little bits if you want. There is even space on the V5 to declare a vehicle personally broken up.

Some councils have rules for doing it on their land and if you are doing it for business you clearly come under the EPA rules as you rightly say.

Even in terms of the EPA. the "cat B" label is not legally binding as the definition is part of the ABI code and still voluntary!

Once a car has had a COD issued sure its hard to put it on the road.... but thats not the point. The point is that the cars are going to get taken out of the "industry" long before they get to the point where the COD is issued. eg it will have been returned to the owner, or sold on.

In terms of buy backs as they are called. The technical term is "retention of salvage" and the principle is ownership is not transferred until the claim is settled. If settlement includes retention of salvage, then the insurance company has never owned the car and hence ABI codes do not apply. Hence the line about returning the V5. Obviously no payout, ownership never can or could transfer.

In theory insurance companys could make some agreement to not pay out where people want to retain salvage on cat A or B cars, however as the whole code is voluntary and not legally binding, the financial ombudsman would (as it has done previously) find in favour of the customer not the insurance company as it would be considered a unfair practice as there are plenty of legitimate reasons to retain salvage and its not the insurers place to make such judgements.

The only obligation under LAW is that the insurance company must notify DVLA of the write off. The reason is to prevent ringing and the written off ID being used on a stolen car. Hence the VIC check.

I agree the system is flawed and more checks need to be in place to prevent dangerous cars getting on the road, however until the law changes nothing will happen.

I cant see a way for legislation to please everyone.

The simple fact is that many Cat B cars CAN be repaired safely if you spend the time and effort, so why shouldnt people be allowed to do so?? Just because a few unscrupulous cowboys bodge such cars and put them back on the road as unsafe vehicles we should ban it for everyone??
EDIT You could make it so all write offs have to go through an IVA test, however a special IVA would have to be resdesigned to cover the type of modern cars as there are a lot of features on modern cars that are due to complexity not allowed under current IVA rules.

The only real limit is more severely damaged vehicles will need such extensive rebuilding that the original idenity will be called into question as not much is left.

The other big flaw with the category system is it is based on value of the car. Many many thousands of expensive or newish cars sustain damage that would on a old banger result in a cat B rating, but they are as high value cars rebuilt with a new shell retaining old id and number plate. Also flood damaged cars are mostly cat B, not because they are "unsafe" but because of the water damage being so time consuming to deal with. However for a DIY mechanic, time costs nothing.

Lets not also forget that the whole write off system is based on "new parts" costs and highly inflated labour and material costs which are unrealistic when dealing with older cars. A prime example is rarer fords and RS cars that can often be written off due to lack of part availability when in reality second hand good parts are readily available.

The whole system is flawed and there is no simple solution. But the simple fact remains that you can quite legally put cat b cars back on the road.