Following on from our last blog post 'car benefit: double cab pick up trucks rules changing' HMRC have announced they are withdrawing this decision. One week after HMRC announced that new guidance that double cab pickups will be classed as cars instead of vans has now been scrapped and these types of vehicles will remain classed as vans.
Concerns were risen from farmers and the motoring industry on the impact they would receive if these changes were put in place - treating double cab pick ups as cars instead of vans. The government have stated "They have 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 the government’s wider aims to support businesses, including vital motoring and farming industries."
Nigel Huddleston, Financial Secretary to the Treasury, said: “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.”
Further information
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.
This will ensure a continued generous and consistent treatment of double cab pick up for capital allowances, benefit in kind, and VAT purposes, maintaining simplicity in the tax system.
This update is only with reference to double cab pick ups with a payload of one tonne or more. Any with a payload of less than one tonne continue to be treated as cars.
For more information, please visit the link below:
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