A change of policy…or not?

On 12 February 2024, HMRC updated its guidance on the tax treatment of Double Cab Pick Ups (DCPUs) following court judgment. The guidance had confirmed that, from 1 July 2024, DCPUs 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.

Since then, there had been a lot of push back from farmers and the motoring industry on the potential impacts of the change in tax treatment. The Government has acknowledged that the court decision and change in guidance 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.

HMRC have now announced that its guidance will be withdrawn, meaning that DCPUs will continue to be treated as goods vehicles rather than cars and businesses and individuals can continue to benefit from its historic tax treatment.

The tax on the benefit-in-kind will now not increase when employers provide these vehicles to their employees and the capital allowances available in the first year of use will now not be reduced when a business purchases this vehicle for use in their trade.

The Government has made it clear that it will be legislating to ensure that DCPU vehicles continue to be treated as goods vehicles for tax purposes.