Double Cab Pick Ups

Huge U Turn from the tax man this week! Only a week after HMRC released new guidance that classed tradesman and farmers favourites double-cab pickups as cars rather than vans, the government has reversed this decision. 

Whats happening?

HMRC confirmed on yesterday (Monday) that it’s scrapping the recently updated guidance announced on 12 February, meaning that double-cab pickups will continue to be treated as goods vehicles rather than cars. 

The government hit the brakes on the guidance after listening to concerns from farmers and the motoring industry on the impact of the changes to the tax treatment. 

The government is now set to legislate to keep things exactly as they were. So double-cab pickups will continue to be goods vehicles for tax purposes and the tax on benefits-in-kind will not increase when employers provide these vehicles to their employees. 

It’s also worth noting that the capital allowances available in the first year of use will now not be reduced when a business purchases this vehicle for use in their trade.

Nigel Huddleston, financial secretary to the Treasury, said: “We will change the law at the next available Finance Bill in order to avoid tax outcomes that could inadvertently harm farmers, van drivers and the UK’s economy.”

Remember though, the classification is only where the payload is over 1 tonne. 

The less preferential treatment of double-cab pickups for benefit-in-kind purposes was set to come into effect from 1 July 2024, so would have only affected new owners, not existing drivers.

Our View

Reacting to the government’s emergency stop on the new guidance, Stuart Haynes of PropertyTax.Wales said, “Whilst it’s true that some double cabs never see mud or the load bay dirty, the majority of them are used the way the legislation intended, as commercials vehicles. In particular, around rural North Wales, they are a highly efficient way of moving staff and materials without having to use two separate vehicles”

If you’re thinking of buying a new vehicle and unsure which is the most tax efficient way to do it, speak to us at PropertyTax.Wales. We can advise on BIK and Capital Allowances to help make the most of your business.