Government Reverses Plans to Reclassify Double-Cab Pick-Ups As Cars
The U-turn came just one week after HMRC announced that double-cab pick-ups would be classified as cars for tax purposes, following a review.
- The proposal was announced on February 12th, to close the so-called ‘loophole’ allowing drivers to enjoy lower taxes.
- The Government announced from July 1st, double-cab pick-ups would be classed as cars when calculating tax payments.
- However, the proposal was highly criticised by affected motorists, who believed it was unfair. Over a week later, the Government has now rescinded plans following complaints.
On February 12th 2024, HMRC - the government’s tax and customs authority - announced a change in tax classification for double-cab pick-ups. A week later, the decision has now been revoked after it was highly contested.
Read on for all you need to know, including how you can continue to benefit from leasing a crew cab pick-up at Vansdirect.
What were the proposed changes?
Historically, double-cab pick-ups with payloads over 1,000kg have been classed as goods vehicles. This was mainly for tax purposes in order to allow drivers to benefit from lower tax rates.
However, since they can be used for transporting both goods and passengers, it was argued they should be reclassified as cars.
It follows a case in the Court of Appeal back in 2020, in which the HMRC won a case against Coca-Cola over classifying their five-seater vans.
What would this have meant for drivers?
If the decision had not been revoked, this would have meant drivers would face significantly higher taxes than before.
Using the Ford Ranger Wildtrak 2.0 as an example, Professional Pickup calculated the astronomical costs this would cause. They discovered that a driver of this vehicle would have to pay £290 a month, or £580 for those on a higher tax rate.
Overall, this would have made company car tax payments soar by as much as £5,376 a year.
Why was the proposal abandoned?
After conversing with the likes of farmers who rely on these vehicles for their livelihood, HMRC saw the light.
They decided to scrap plans in order to support businesses in the motoring and farming sectors, in line with the Government’s wider aims.
It means that double-cab pick-ups will not be classed the same as cars, saving drivers from higher taxes. A particular benefit to those in the agriculture and farming industry.
Benefits of leasing a crew cab pick-up
Interested in leasing a crew cab pick-up for your business? As well as lower tax rates, here are some of the other benefits you can enjoy at Vansdirect:
- Competitive prices with our van leasing deals.
- Flexible finance options to help spread the costs.
- Access to our additional services such as maintenance, fuel cards, racking and security.
- Specialist support from our team of experts when choosing your van.
- A wide selection of models from top manufacturers including Ford, Isuzu, Toyota, and Volkswagen.
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With thousands of happy customers nationwide, we’re confident we can help you find the perfect van for your needs.
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