Government scraps pickup tax changes

(Posted on 20/02/24)

Last week, the government announced a significant shift in vehicle classification, designating double cab pickups as company vehicles rather than goods vehicles. This change, which applies to all double cab pickups regardless of weight, replaced the previous classification where vehicles over 1 ton were considered goods vehicles. The reclassification had significant implications, particularly in terms of Benefit in Kind (BIK) tax, with some individuals facing triple the tax costs, amounting to thousands of pounds annually.

However, following widespread backlash, HMRC swiftly reversed their decision, citing feedback from farmers and the motoring industry. The proposed change, scheduled for implementation in July 2024, was withdrawn entirely. Many expressed concerns that the revised guidance would hinder fleet modernization efforts, as individuals might hold onto their vehicles longer to avoid increased tax burdens upon replacement.

As a result, double cab pickups will continue to be treated as goods vehicles for tax purposes, alleviating concerns about substantial BIK tax payments in the coming years. Vehicles weighing less than 1,000kg will maintain their classification as cars, while those surpassing this weight threshold will continue to be classified as goods vehicles, a designation that remains unchanged.

The Financial Secretary emphasised the government's commitment to amending the law in the next available finance bill to prevent adverse tax outcomes that could negatively impact farmers, van drivers, and the broader UK economy.

Check the Governments original plans.