Apologies if this is blindingly obvious, but...
I am aware that, for the purposes of benefits in kind, double cab pick ups will be treated by HMRC as vans provided they meet the VAT definition, ie 1 tonne payload or more.
I had always assumed the same concession applied for FYA purposes, but there doesn't seem to be any reference to this in the Revenue's capital allowances manual and sections 81 & 82 of the CAA 2001 make no reference to it.
Can anyone confirm whether the same concession does apply for FYA purposes?
It does seem rather odd that there would be one rule for VAT & benefits in kind and another for capital allowances, but then, who said tax was logical?
Peter Cane
Replies (5)
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Commercial vehicles qualify for FYAs
I don't think there is existing (or any need for) a concession re: pick ups double cab or not, regarding Capital Allowances and in particular First Year Allowances.
Plant & Equipment in general qualifies for FYAs, with certain exceptions.
It is cars [see exemption note below] that are debarred from FYAs, and a double cab pick up (until proven otherwise in a tax case) is a commercial vehicles not cars.
[Exemption to debarrment of FYAs for cars : those cars that have CO2 emissions <120g/km qualify for 100% FYA.]
There might be a VAT - vs- Income Tax / Corporation Tax anomally with certain very small vans: I've seen some VAT guidance claiming that a Vauxhall Corsa van (2 seats, no back windows) is "not a van" for VAT purposes so it's a car for VAT purposes with no input tax reclaim availability - but I am unaware of a debarment for Income Tax of FYA's on such seemingly unfair rules.
Payload as an indicator of commercial use
Is anyone aware of any cases where FYAs on double cab pick ups have been denied by HMRC (as opposed to denied by their tax advisors) , or is this just a potential issue to consider ?
The payload and design might be an indicator of whether or not a double cab pick up is " of a construction primarily suited for the conveyance of goods or burden..." or "of a type not commonly used as a private vehicle".
Being a pick up = conveyance of goods.
Double cab = conveyance of burden (typically workforce!)
Not commonly used as a private vehicle = used at all privately or mainly for private use ?
So Peter, your clients get restricted WDAs on their double cab pick ups whereas my clients (and those of my colleagues) get FYAs ?
Anyone else denying their clients FYAs on these double cab pick ups ?
Lack of clear guidance
Yes there seems to be no specific guidance, HMRC's internal guidance (BIM series) on Plant & Machinery capital Allowances (PMA) says :-
For PMA purposes a car is a mechanically propelled vehicle except a vehicle:
1. constructed in such a way that it is primarily suited for transporting goods of any sort, or
2. of a type which is not commonly used as a private vehicle and is not suitable for use as a private vehicle.
As the word "or" appears between conditions 1. and 2. it is only ONE of those conditions that has to be complied with to qualify as NOT being a car...
either 1. Primarily suited for transporting goods (ie. look at the payload here - weight of number of people that could be seated in the vehicle vs. total payload)
or 2. "not commonly used as a private vehicle" - here I would make the point that most commonly double cab pick ups are probably owned by businesses. If it went to a Commissioners' hearing then a show of hands of those present at the meeting to see how many owned such a vehicles might be a useful exercise. I would be extremely surprised to find a private non-business individual having such a vehicle.