Drivers will no longer lose out on thousands of pounds after major tax changes that were set to be introduced in July have been scrapped by the Government in a staggering U-turn.
It was announced last week that new taxes would be introduced in the coming months that would have charged double cab pick-up trucks as company cars.
Had the law gone ahead, anyone who purchased a double cab pick-up truck after July 1, 2024, could have seen them hit with a near-fivefold increase in their personal tax bills.
Any pick-up truck with a payload of more than 1,000kg is considered a commercial vehicle, in line with VAT rules, meaning business users can reclaim tax on their vans and pick-up trucks.
Do you have a story you'd like to share? Get in touch by emailingmotoring@gbnews.uk
The new car tax changes would have been introduced in July
GETTY
Most double cab pick-up trucks have diesel combustion engines, meaning they would attract the highest rate of Benefit-in-Kind (BiK) tax, also known as company car tax.
In a new announcement, HMRC said it had “listened carefully” to views from farmers and the motoring industry on the impact of the change in taxes.
It has now been decided that the existing guidance will be withdrawn, meaning double cab pick-up trucks will continue to be treated as goods vehicles rather than cars.
With the new U-turn, these vehicles will still be considered as goods vehicles meaning drivers and businesses can continue to benefit from the historic tax break.
Speaking before the U-turn, Mike Hawes, chief executive of the Society of Motor Manufacturers and Traders (SMMT), said the changes would “raise costs significantly, and make an untenable choice for many”.
Nigel Huddleston, Financial Secretary to the Treasury, said the changes were being paused in a bid to prevent the motoring industry from being hammered with additional 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.”
It was also announced that the Government will consult on the draft legislation to ensure it works for those affected before introducing it in the next available Finance Bill.
A prominent piece of legislation saw Coca-Cola win an appeal around how HMRC classes vehicles, allowing the drinks brand to class Vauxhall Vivaro and VW Transport T5 Kombis as cars and not vans.
The tax on BiK will now not increase when employers provide these vehicles to their employees to ensure a “continued generous and consistent treatment” of double cab pick-up trucks.
Benefits of this include capital allowances, Benefit in Kind and VAT purposes as well as maintaining simplicity in the tax system.
The latest update from HMRC states that it will only apply to double cab pick-up trucks with a payload of one tonne or more.
LATEST DEVELOPMENTS:
- Electric car owners can benefit from Octopus offer that 'guarantees free charging' and may save drivers £850
- Pensioner with dementia prosecuted by DVLA for letting car insurance expire despite not driving for two years
- Motorists risk massive £5,000 fine for driving with pets in the car and could break Highway Code rules
Double cab pick-up trucks are very popular among tradespeople
PA
Double cab pick-up trucks with a payload of less than one tonne will continue to be treated as cars.
