Threat of double cab pick-up tax change remains despite U-turn (video)

Fleet decision-makers have been warned that the threat of a change to the tax treatment of double cab pick-ups remains.

The Government announced that the vehicles would be treated as company cars rather than vans, before sensationally scrapping the policy seven days later. 

Paul Hollick, chair of the Association of Fleet Professionals (AFP), said the U-turn was “embarrassing” for HMRC and highlighted the power of the farming community.

However, he told Fleet News at 10 that the issue has not gone away and will have to be dealt with by the next Government.

“The Government with the HMRC do want to try and change things... that will happen at some point in the next couple of years,” he warned.

HMRC originally decided to update its guidance on the tax treatment of double cab pick-ups on February 12, following a 2020 Court of Appeal judgment.

The guidance stated that from July 1, 2024, all double cabs with a payload of one tonne or more would be treated as cars rather than goods vehicles for both capital allowances and benefit-in-kind purposes.

The new rules were due to apply to all double cab pick-ups ordered after July 1 - any vehicles already on fleet or ordered before July would still be subject to the existing classification until April 2028.

However, following a backlash, the Government has decided to withdraw the new guidance.

Consequently, double cab pick-ups will continue to be treated as goods vehicles rather than cars, and businesses and individuals can continue to benefit from the historic tax treatment.

In a statement, the Government said its 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 its wider aims to support businesses, including motoring and farming industries.

The Treasury says it will now consult on the draft legislation to ensure that it achieves that outcome before introducing it in the next available Finance Bill.

Nigel Huddleston, financial secretary to the Treasury, 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.”

Watch the full debate from Fleet News at 10