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Point 1. No, it is not being done as a recall ... AT PRESENT. Recalls are usually only done for safety-critical items (for example, the airbag recalls that have been taking place the last few years). Even then, the recall is voluntary. Nobody can FORCE you to take your car in for the recall.
Point 2. UK MOT emission checks do not check for NOx, which is what the 'cheat' software was designed to reduce. So that will make no difference ... AGAIN, at present.
If, in the future, they decided that NOx testing was a part of the MOT test, and your car failed because it had not had the recall, then you might well find yourself rather screwed, however. In addition (though very unlikely), it would be possible, if lots of people refused to take their cars in for the recall, the recall could be made mandatory by a Statutory Instrument from VOSA, passed through parliament. At that point, vehicles not having had the recall carried out could (in theory) be refused MOT certificates.
I'd suggest you contact VAG if you have further queries.
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