Double-Cab Pickups: Tax Classification Changes and What They Mean for You
Published 9th August 2024
At Hammond-Barr Accounting, we always monitor the latest tax developments that could affect our clients in Stevenage and beyond.
Recently, there has been a significant change in how HMRC classifies double-cab pickups for tax purposes, and we want to ensure you're fully informed.
The Recent U-Turn
Surprisingly, HMRC has reversed its decision to classify double-cab pickups as cars for employment tax and capital allowance purposes. This means these vehicles will continue to be treated as goods vehicles, preserving the tax benefits many businesses and individuals have come to rely on.
However, it's important to note that double-cab pickups with a payload of less than one tonne will still be classified as cars.
What Defines a Double-Cab Pickup?
For clarity, a double-cab pickup typically has:
A front-passenger cab with a second row of seats, capable of seating about four passengers plus the driver
An uncovered pickup area behind the passenger cab
Tax Implications
The continuation of the current classification means:
Benefit in Kind: The benefit for drivers using a double-cab pickup (e.g., a basic Ford Ranger) as a company vehicle remains based on a fixed rate of £3,960.
Fuel Benefit: Any extra benefit in kind for fuel continues to be based on a fixed rate of £757 per year.
Capital Allowances: Double-cab pickups will still qualify for annual investment allowances or full expensing as they have in the past.
VAT Considerations
It's worth noting that the definition of a van remains unchanged for VAT purposes. A vehicle with a payload exceeding one tonne is still considered a van for VAT calculations.
What This Means for You
If you're a business owner or self-employed individual using a double-cab pickup, this decision allows you to maintain your current tax planning strategies. However, it's crucial to stay informed about any future changes that may occur in this area.
How We Can Help
At Hammond-Barr Accounting, we understand that navigating these tax rules can be complex. We're here to help you:
Assess how these rules apply to your specific situation
Explore tax-efficient vehicle options for your business
Ensure you're maximising available tax benefits while remaining compliant
Next Steps
While this U-turn provides continuity for many, it is always wise to review your vehicle tax strategy regularly. If you'd like to discuss how these rules affect your business or personal tax situation, we invite you to book a consultation with one of our experienced accountants.
Remember, staying informed and proactive is critical to effective tax planning. We're here to help you navigate these and any future changes to ensure your tax strategy remains optimal.
Want to know more?
You can contact Hammond-Barr accountants on 01438 281281 or via email at [email protected].
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