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HMRC backtracks on tax changes for double cab pickups

In an unexpected turn, HM Revenue and Customs (HMRC) has reversed its decision on the tax classification of double cab pickups. Originally announced on 12th February 2024, the policy shift would have reclassified double cab pickups with a payload exceeding one tonne from vans to cars. This change was poised to significantly alter the benefit in kind, capital allowances, and VAT implications for these vehicles within businesses.

The initial announcement was met with considerable pushback from key stakeholders, including the farming community and the automotive industry. Concerns were raised about the potentially adverse impacts on businesses, highlighting that the revised classification would not align with HMRC’s broader objectives and strategies.

Taking these concerns into account, HMRC has decided to retain the existing classification, allowing double cab pickups to continue being categorised as goods vehicles. This decision ensures that the tax treatment of these vehicles remains unchanged, safeguarding businesses from unforeseen financial burdens.

Nigel Huddleston, Financial Secretary to the Treasury, emphasised the government’s responsiveness to the feedback, stating, “In response to the concerns raised, we will amend the legislation in the next Finance Bill. This action will prevent unintended tax consequences that could negatively affect farmers, van drivers, and the broader UK economy.”

This move by HMRC underscores the importance of stakeholder feedback in shaping tax policy and demonstrates the government’s commitment to supporting the business community and ensuring tax regulations reflect the practical realities of industry and commerce.

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