New Double Cab Pickup Tax Rule
Does your business own double cab pickups?
These vehicles are very popular in construction and farming. For over 20 years, they have been classified as cars for tax purposes. From 1 July 2024, this will change.
The guidance confirms that, from 1 July 2024, double cab pickups (DCPUs) with a payload of one tonne or more would be treated as cars rather than goods vehicles for both capital allowances and benefit in kind (BIK) purposes.
Business owners using DCPUs and company vehicles have enjoyed the flat commercial vehicle rate of BIK tax and 100% annual investment allowance in the year of purchase. Both advantages will disappear under the new guidance and employers could face higher NIC charges.
Mike Hawes, chief executive of automotive trade body, the Society of Motor Manufacturers and Traders (SMMT), said: ‘Double cab pickups are critical business tools for many companies and sole operators across Britain.
‘HMRC’s decision to tax them as cars rather than commercial vehicles for benefit-in-kind (BIK) purposes will raise costs significantly, and make them an untenable choice for many.
‘The move risks stalling the overall market and its decarbonisation, as businesses will be likely to hold on to older vehicles for longer.’
Whilst DCPUs with a payload over one tonne will be classed as a car from 1 July 2024, they will remain a van for VAT purposes.
Does this ruling affect your company?
Discuss your business circumstances with the friendly experts at Hargreaves Owen without obligation. We’ll minimise your tax liability and ensure your business is compliant. Let’s talk.