shbangsteve
Well-Known Member
Farmers hit with second tax raid in Budget small print
Reeves closes valuable loophole by reclassifying commercial pick-ups as cars
Farmers face paying thousands of pounds extra in car tax after Labour quietly closed a valuable loophole for pick-up truck drivers.
Annual bills will rocket for vehicles such as the Ford Ranger and Nissan Navara which will be classed as cars rather than vans from next April.
The policy change, which was buried on page 133 of last week’s Budget document, puts an end to a quirk allowing significant benefit-in-kind tax breaks for commercial vehicles. It means a basic rate taxpayer’s annual bill will rise from £792 a year to £4,400.
The shake-up has added to a “smorgasbord of bad news” unveiled in the Budget for farmers, who were left reeling by Rachel Reeves’s decision to impose a 20pc inheritance tax on assets worth more than £1m.
The Tories opted to close the double cab tax break in February this year but reversed the decision within a matter of days following strong backlash from the farming community.
HM Revenue & Customs conceded that the policy change would “risk unintended harm to agricultural businesses”.
Yet just eight months down the line, the controversial measure has been reinstated.
From April, commercial pick-up trucks weighing more than one tonne will be classed as cars rather than vans for benefit-in-kind purposes.
Tax bills for four-door trucks will rocket as a result. A 20pc taxpayer driving a pick-up as a company vehicle currently pays a flat rate of £792 a year, while a 40pc taxpayer pays £1,584 a year.
Bills will surge to £4,400 a year for a basic rate taxpayer and £8,880 a year for a higher rate taxpayer driving Ford Ranger 2.0-litre diesel.
The huge jump is because rather than being charged a flat rate as they currently are, the benefit-in-kind on trucks will be calculated on a sliding scale based on emissions.
Alistair Carmichael, the Lib Dem MP for Orkney and Shetland, said: “The more detail that we learn about this Budget the more we see a smorgasbord of bad news for farming rooted in a lack of understanding of how our rural communities work.
“Rural businesses saw off a first attempt by HMRC to hike tax on double cab pick-ups earlier this year. Now that hike has been snuck back on to the agenda without justification.
“What has changed since this plan was abandoned in February?”
A transition period will allow employers who purchase, lease, or order pick-ups before next April to continue benefiting from the current tax treatment until 2029. As a result, there could be a rush of orders from tradespeople and farmers to secure a double cab pick-up within the next five months.
Four-door pick-ups have significantly grown in popularity over the past decade, owing in part to the benefit-in-kind tax break.
Stephanie Sharpe, a tax director with Moore Kingston Smith, previously told The Telegraph: “Pick-up trucks have become very fashionable for some, and you do see people swanning about in them with gleaming paint – but then others use them truly as workhorses every day, and they need to have them for the demands of their job.”
Budget papers cite a Court of Appeal decision from 2020 when Coca-Cola claimed that four-seat crew-cab versions of the Vauxhall Vivaro and Volkswagen Transporter vans used in its fleet should be taxed as commercial vehicles for benefit-in-kind purposes.
The Court ruled in favour of HMRC’s decision to tax the vehicles as private cars – paving the way for a full-scale rule change brought in by the new Government.
Mr Carmichael, who chairs the Environment, Food and Rural Affairs Committee, added: “The goodwill of farming communities is rapidly being frittered away.”
The Treasury was approached for comment.
Not just farmers, plenty of builders, chippys gamekeepers etc, too.
The Labour party really does hate all small business owners.
