On Monday 12th February 2024, HMRC announced that it intended to treat double cab pick-ups with a payload of one tonne or more as cars rather than goods vehicles/vans for both capital allowance and benefit-in-kind purposes.
Roll on a week and HMRC has now announced that it will not be bringing in the new guidance and that double cab pick-ups will continue to be treated as they are at present.
This means that HMRC will continue to use the VAT approach for double cab pick-ups, where vehicles with a payload of under one tonne will remain classified as a car, and with a payload of over a tonne, classed as a goods vehicle.
In 2020, Coca-Cola lost its fight against HMRC in a Court of Appeal hearing where the judgement ruled that its Volkswagen Kombi and Vauxhall Vivaro fleet vehicles should be classed as company cars, not vans, and taxed accordingly. The case centred around the second row of seats and rear passenger window(s) in the vehicles, which in the view of the Court of Appeal judges, made the vehicles equally suited to carry people as they were goods.
Back to the double cab pick-up – in its original release HMRC cited this case as a reason for changing its view on these vehicles, which are arguably also equally suited to carrying passengers and goods. But in the HMRC release on 19th February 2024, a u-turn was announced on the back of the fact that “the government has listened carefully to views from farmers and the motoring industry on the potential impacts of the change in tax treatment. The government has acknowledged that the 2020 court decision and resultant guidance update could have an impact on businesses and individuals in a way that is not consistent with the government’s wider aims to support businesses, including vital motoring and farming industries”.
The Government has stated they will now legislate to protect the position of double cab pick-ups, so this is unlikely to affect the treatment of other multi-purpose vehicles which are largely now treated as cars following the Coca-Cola case, but we await the details in the next Finance Bill.
If you are unsure about the tax treatment on any commercial vehicles, please do get in touch with us for clarification and guidance.
To find out more about business motoring and the relevant tax treatments download our Guide to Business Motoring here.
All data and figures referred to in our news section are correct at the date of publishing and should not be relied upon as still current.
