Government U-Turns on Double-Cab Pick-Up Taxation

The new rules were designed to close a perceived ‘loophole’ where double-cab pick-ups with a payload greater than one tonne could be taxed as a commercial vehicle and not a car.

The legislation would have prevented company car drivers from enjoying fixed Benefit in Kind (BiK) rates ranging from £66 to £132 per month, depending on their tax bracket.

The passenger car reclassification, set to commence on 1 July 2024, would have cost drivers thousands of pounds more in tax expenses, with BiK rates being determined by the double-cab’s emissions instead of the fixed commercial vehicle rates.

However, just one week after its initial taxation announcement, the government has gone back on its decision.

Why did the government change its mind?

An HMRC statement said: “The government has listened carefully to views from farmers and the motoring industry on the potential impacts of the change in tax treatment. The government has 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.”

The news comes as a relief to leasing brokers and their customers as the latest announcement confirms that the tax ruling will revert to exactly how it was before.

Nigel Huddleston, Financial Secretary to the Treasury, commented: “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.”

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