POST EDIT Government Update: 20/02/2024

The government has listened to the views of farmers and the motoring industry and made a U-turn on the double-cab pickup decision below.

We recently shared a change to double-cab pickups and their commercial status. This has been withdrawn as of Monday 19th February 2024.

For full details on this withdrawal please see HMRC’s website

*Important Tax Update: 15/02/2024* The information below has been withdrawn see the above link for an update on Government decision)
Starting July 1, 2024, HMRC is implementing a significant change in the classification of double cab pickups for tax purposes. This alteration stems from a recent decision by the Court of Appeal in a tax case, reshaping how these vehicles are treated under the tax system.

Previous Classification:
Previously, tax regulations aligned with the VAT approach, categorizing double cab pickups based on their payload capacity. Those with a payload under one tonne were considered cars, while those over one tonne were classified as vans. This classification carried implications for businesses, allowing them to claim the Annual Investment Allowance (AIA) for full tax relief upon purchase. Additionally, it resulted in lower Benefit In Kind (BIK) charges for employees.

New Classification:
Under the revised rules, double cab pickups will only be deemed vans if their construction primarily suits the transportation of goods. However, vehicles equally suited for transporting goods and passengers, such as double cab pickups with a second row of seats, will now be treated as cars.

Implications of the Change:

Transitional Arrangements:
Transitional arrangements are available for pickups acquired or leased before July 1, 2024. For contracts initiated before this date, if the vehicle is delivered and in operation by December 31, 2024, the previous tax rules will still apply.

Strategic Considerations:
To optimise tax benefits, businesses seeking to procure double cab pickups are advised to do so before July 1, 2024. Conversely, for those transitioning away from these vehicles, selling before this date may be advantageous, considering the potential impact of the rule change on their value.

Contact Us:
Should you have any questions regarding how these changes may affect your business, please do not hesitate to get in touch with us using our contact form below.

Our team is here to provide guidance and support.

Tel: 01292 265071


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