Major car tax changes 'will happen at some point in the next couple of years' despite U-turn last month

Major car tax changes 'will happen at some point in the next couple of years' despite U-turn last month

WATCH: MAJOR car tax changes scrapped in huge U-turn amid driver concerns

Felix Reeves

By Felix Reeves

Published: 02/03/2024

- 10:00

Drivers could have faced a fivefold increase in charges under the original rules

Experts have warned that the Government could look to introduce new car tax changes despite a major U-turn on the policy last month.

Under original plans laid out by the Government at the start of February, owners of double cab pick-up trucks would have been charged as company cars.

This would have seen anyone purchasing a double cab pick-up truck after July 1, 2024, hit with a near-fivefold increase in their personal tax bills.

These vehicles include any pick-up truck with a payload of more than 1,000kg, with notable models including the Ford Ranger Wildtrak.

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Car tax warning letter

The Treasury performed a U-turn one week after announcing the plans


However, these rules have since been scrapped with HMRC saying it had “listened carefully” to the motoring industry when deciding to U-turn.

It confirmed that the existing guidance would be withdrawn, allowing double cab pick-up trucks to be treated as goods vehicles rather than cars.

Fleets and businesses are able to reclaim tax on their vans and pick-up trucks thanks to the existing rules, although this would be under threat if the suggestions are put forward.

Paul Hollick, chair of the Association of Fleet Professionals (AFP), described HMRC as “embarrassing” and highlighted the power of the farming community.

The expert suggested that the next Government will have to deal with the problem, hinting that the issue would not go away.

Speaking to Fleet News at 10, he said: “The Government with the HMRC do want to try and change things... that will happen at some point in the next couple of years.”

After the U-turn, the Treasury confirmed that it would consult on the draft legislation to ensure it achieves a suitable outcome.

Any new plans following the updates could be included in the next available Finance Bill.

Financial Secretary to the Treasury Nigel Huddleston said the U-turn was necessary to prevent drivers being hammered with extra costs.

The Conservative MP for Mid Worcestershire added: “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.”

Many experts are hoping that the Government will introduce new updates to car tax changes in the upcoming Spring Budget on March 6.

In the previous Autumn Statement, it was announced that the Government will uprate Vehicle Excise Duty (VED) rates for cars, vans and motorcycles in line with RPI from April 1, 2024.


Ford Ranger Wildtrak

The Ford Ranger Wildtrak is one of the most popular double cab pick-up trucks


This was in addition to frozen rates of VED for HGVs and the HGV levy to remain at the same 2023-24 rates for 2024-25.

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