Double Cab Pick Up to Continue as Goods Vehicle (HMRC)
In February 2024, HMRC updated guidance to classify double cab pickup trucks (DCPUs) as cars. This decision caused concern among farmers and the motoring industry, who rely on the tax benefits of classifying DCPUs as goods vehicles.
Double cab pickups with a payload over 1 tonne or more would be treated as cars as opposed to goods vehicles for both capital allowances and benefit-in-kind purposes.
The government has listened to concerns from double cap pickup owners and is reversing the decision. They will legislate to ensure that DCPUs are classified as goods vehicles. This will maintain the current tax benefits for DCPUs, which are important for businesses and individuals who rely on them for work.
We at Warrington Isuzu welcome this decision by the government. It is a positive outcome for our customers and the wider industry. We will continue to provide our customers with the latest information on tax and regulations.
What does this mean for you?
If you own or operate a double cab pickup truck, you can continue to enjoy the current tax benefits. These benefits include:
- Employers can now provide Double Cab Pick Up trucks to their employees without facing higher taxes on the benefit received by the employee. Additionally, businesses purchasing these trucks will benefit from the full amount of tax relief in the first year of ownership, ensuring they don't lose out on potential savings.
- This decision ensures that Double Cab Pick Up trucks continue to be treated consistently and favourably for tax purposes, simplifying the system for businesses and individuals. This covers three key areas:
- Capital Allowances: Businesses can claim the full amount of depreciation on the vehicle in the first year.
- Benefit-in-Kind (BIK) Tax: Employees receiving these vehicles as company cars won't face higher BIK tax charges.
- VAT: Businesses can reclaim the full VAT they pay on the purchase of the vehicle.
- The previously announced changes to the tax treatment of Double Cab Pick Up trucks have been withdrawn. This means the information previously provided by HMRC on February 12th 2024, is no longer valid.
We encourage you to contact us at Warrington Isuzu if you have any questions about the tax treatment of DCPUs.