U turn on double cab tax changes

[libensvolenspotens]

Update: HMRC U-turn on double cab pickup tax hike​ The Government announced on 12 February 2024 that it would be changing the tax treatment of double cab pickups purchased, leased or ordered from 1 July. However, following widespread concern, particularly from the agriculture and motor industries, the change has now been withdrawn. With a General Election on the cards for this year, it’s no real surprise that the Government has decided to backtrack given the substantial criticism of the proposed update. What is a surprise is that it’s been reversed only one week after it was announced – leading to questions on whether any consultation or analysis was undertaken before the alteration was put forward. What would the change have meant?​ The tax treatment of vans and cars are significantly different. When the change was set to come into force and double cab pickups were to be classed as cars instead in many cases, there was to be a substantial uplift in the amount of benefit in kind (BiK) owed for the average tax payer (40% rate). We’ve set out an example below: The example is based upon a Nissan Navara, with CO2 emissions of 169g/km and a list price of £32,000.

Pre 1 July 2024 Post 1 July 2024 Increase Tax impact (40%) Vehicle Benefit in Kind​ £3,960​ £11,840​ £7,880​ £3,152​ Fuel Benefit in Kind​ £757​ £10,287​ £9,529​ £3,812​

There was also due to be an impact on the capital allowances relief available. As with BiK, double cab pickups were to be treated as cars opposed to vans. This would have resulted in them only being eligible for limited Writing Down Allowances instead of valuable tax reliefs such as Annual Investment Allowances of Full Expensing. The changes were dependent on suitability tests, as set out in the high profile Coca Cola v HMRC 2020 court case. If the primary purpose couldn’t be determined as being for the transportation of goods as opposed to being primarily for the conveyance of passengers, the vehicle would have been treated as a car. The reversal will likely be welcome news for many, and it’s good to see that the Government has taken industry concern into account.

 

[Pete6.5]

So the vehicle companies waded in when they were looking like a loss in sales.

 

[slider]

Ah, but likely only to be a temporary reprieve for those that simply have a DC as a company "car" for life style purposes rather than work need.

The HMRC update states.

This move is resultant of the government making clear that it will be legislating to ensure that DCPU vehicles continue to be treated as goods vehicles for tax purposes.

The government will consult on the draft legislation to ensure that it achieves that outcome before introducing it in the next available Finance Bill.

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.”

 

[Dodder]

Shame they don't do a u-turn on the hated expanded ULEZ zones...