Swift reversal by HMRC for double-cab pick-up trucks
HM Revenue and Customs (HMRC) has reversed plans to classify double-cab pick-up vehicles as cars for tax purposes - just one week after announcing the proposal. The reason cited for this swift U-turn, was feedback from farmers and the motoring industry who highlighted the potential impacts of the proposed change in tax.
Double-cab pick-up trucks are defined by HMRC as having a front passenger cab with a second row of seats and capacity to seating about 4 passengers plus the driver, together with four doors and a pickup area behind the passenger cab. Any double-cab pick-up truck that meets the criteria of having a payload of more than 1,000kg (or 1,045kg with a hardtop/canopy/truckman top) is considered a commercial vehicle.
This classification of double-cab pick-up truck as a commercial vehicle is significant, since it means those using double-cab pick-up trucks as a company vehicle pay a commercial vehicle rate of benefit-in-kind (BiK) tax, which often works out cheaper than running a car as a company vehicle. The use of a commercial vehicle also allows VAT-registered companies to make savings.
Modern incarnations of double-cab pick-up vehicles from manufacturers such as Ford, Toyota, Isuzu, Nissan and even Mercedes have found favour with company vehicle users in various industries due to this classification as a commercial vehicle together with Tonka-truck looks and versatility, but with car-like interiors and driving characteristics.
If the now-withdrawn changes had come into effect, a double-cab pick-up would have been classified as a car from July 2024. Company cars are assessed on their CO2 emissions, which means the cost of running a double-cap pick-up would have increased significantly.
HMRC have elected to abandon plans to deviate from the existing commercial vehicle classification for double-cab pick-up vehicles, meaning users and business owners can continue to benefit from the cost savings.
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