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Double cab pick-up vehicles (with payload over one tonne) might be thirsty, but their treatment as commercial vehicles means they are tremendously tax efficient. They often qualify for VAT reclaim on purchase, 100% annual investment allowance and (for company directors) eligibility for van (rather than car) benefit-in-kind charges. This regime compares extremely favourably with the harsh tax treatment of equivalent cars.
On 12th February, HMRC announced that they would treat newly acquired double cab pick-ups as cars for income tax purposes from July 2024. This seemed destined to destroy the market for double cab pick-ups at a stroke.
Exactly a week later, Government overruled HMRC with a statement that, following representations from the farming and motoring industries, legislation will be introduced to ensure that double cab pick-ups with payload over one tonne will continue to be treated as commercial vehicles for tax purposes. This U-turn is great news for farmers but, when the legislation becomes available, we will need to check it carefully. Many double cab pick-ups are rated close to the critical one tonne payload threshold and a small change in definition or the treatment of accessories (such as a canopy or towbar) could still be problematic.
If you are considering purchasing a vehicle, please do get in touch to discuss the tax consequences.