Update – November 2024 – Autumn 2024 budget has reversed the situation below, and Double Cab Pick-ups are now reclassified as Cars
Double Cab Pickups – Change in Autumn Budget 2024
A rather bizarre situation recently.
HMRC recently announced a change in how Double Cab Pick-ups were classified for Income Tax purposes in respect of (a) Capital Allowances and (b) Benefit in Kind Charge, the changes were to apply from 1st July 2024, and would reclassify these as cars and not commercial vehicles.
The practical effect would be (a) reduced Capital Allowances for all businesses and (b) where provided to an employee (including a company director) an increased Benefit in Kind Charge to Income Tax and Class 1A NIC.
After what was reported to be lobbying from the farming sector, HMRC withdrew these proposals and said that they will change the law at the next available Finance Bill “to avoid tax outcomes that could inadvertently harm farmers, van drivers and the UK’s economy”.
This means for now no change, and for Capital Allowances and NIC a Double Cab Pickup with a Payload of more than 1,000kg will remain classified as a Commercial Vehicle.
A few points to note:
- No changes to Private Use Adjustments for Unincorporated Businesses
- The definitions for VAT are different and, again, unchanged
- The boundary between what is a car and what is a commercial vehicle is a tricky one, and HMRC in recent years have won cases around “Combi Vans” classifying them as cars
Doubtless this issue will rumble on, but for now no change.