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Ford F-150 Lightning on a road| AccountingWEB | Double-cab pickups go back to being vans, not cars
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Double-cab pickups go back to being vans, not cars

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Only a week after HMRC released new guidance that classed double-cab pickups as cars rather than vans, the government has now performed a screeching U-turn and has reversed this decision. 

20th Feb 2024
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HMRC confirmed on yesterday (Monday) that it’s scrapping the recently updated guidance announced on 12 February, meaning that double-cab pickups will continue to be treated as goods vehicles rather than cars. 

The government hit the brakes on the guidance after listening to concerns from farmers and the motoring industry on the impact of the changes to the tax treatment. 

The government is now set to legislate to keep things exactly as they were. So double-cab pickups will continue to be goods vehicles for tax purposes and the tax on benefits-in-kind will not increase when employers provide these vehicles to their employees. 

It’s also worth noting that the capital allowances available in the first year of use will now not be reduced when a business purchases this vehicle for use in their trade.

Nigel Huddleston, financial secretary to the Treasury, said: “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.”

HMRC noted that the update is only for double-cab pickups with a payload of one tonne or more; those with less than one tonne will continue to be treated as cars. 

At the crossroads

The less preferential treatment of double-cab pickups for benefit-in-kind purposes was set to come into effect from 1 July 2024. The treatment of double-cab pickups has been hotly debated following the 2020 court of appeal decision in Payne & Ors (Coca-Cola) vs R & C Commrs (2020), ruling that most multi-purpose vehicles, such as double-cab pickups are cars.  

Recognising the Coca-Cola Court of Appeal decision, the previously revised guidance from HMRC replaced EM23150 with EM23151. But these arrangements are now redundant. 

Reacting to the government’s emergency stop on the new guidance, Tax is always taxing noted on Any Answers: “It solves a headache for me, we have 132 of these on the road, but not sure about common sense. While some of them are genuinely required, two-thirds of them never see a bit of dirt and are just commuting vehicles. Replacing them would have been a nightmare though.”

However, not everyone was happy with the U-turn. Accounting bean said: “Am I the only one who thought this was a great step towards removing unnecessarily large vehicles from our roads?”

Replies (48)

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By richards1
20th Feb 2024 11:50

So much for climate change. These vehicles are the worst polluters and yet the Government lets them off.
Why bother let the planet burn.

Thanks (23)
Replying to richards1:
Should Be Working ... not playing with the car
By should_be_working
20th Feb 2024 12:08

Indeed. The leadership in Bejing was about to follow our example on climate change and shut down all their coal-fired power stations after last week's news, now they know they can carry on.

/s

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Replying to should_be_working:
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By philaccountant
20th Feb 2024 12:18

Whataboutism at its finest.

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Replying to philaccountant:
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By FactChecker
20th Feb 2024 12:43

When Harold Wilson said: ‘A week is a long time in politics’, I doubt even he thought that 60 years later we could say ‘A week is a long time in taxation’!

I'm just waiting to hear of the first claims from affected sellers of these vehicles ... regarding the (now needlessly) reduced prices they obtained last week ...

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Replying to philaccountant:
Should Be Working ... not playing with the car
By should_be_working
20th Feb 2024 13:08

No whataboutism at all.

The UK accounts for about 1% of all global CO2 emissions so whatever we do will have no measurable effect. We stymie our economy - in this case with higher taxation - with the justification that we are setting an example and taking a lead. Not much point taking the lead when you're not being followed by anyone that counts!

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Replying to should_be_working:
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By Yossarian
20th Feb 2024 13:38

And of our 1%, only about a quarter of that is due to road transport. In global terms the total CO2 produced by UK vehicles is barely a rounding difference..

Thanks (12)
Replying to DMS:
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By TBro4iuABEW6Qmh74nRteQz3
20th Feb 2024 13:48

This guy gets it.

Thanks (5)
Replying to DMS:
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By paddyb
20th Feb 2024 15:08

For those of you familiar with 'Godwins Law', I would propose the adoption of another such law or adage asserting that:-

As an online discussion grows longer, the probability of a comparison involving climate change or combustion engine pollution will increase, Reductio ad environmental.

The proposed tax change had nothing to do with the environment or pollution. It was an attempt by HMRC to close what they see as a tax loophole. As someone with a business in the Republic of Ireland, I would advise you all to keep up to speed with the changes in Irish tax legislation. It seems to me that what happens there, appears here in the UK after a few years. They abolished both the lenient BIK and road fund license (car tax) rates for these vehicles years ago in the ROI.

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Replying to richards1:
paddle steamer
By DJKL
20th Feb 2024 16:33

(Burn, baby, burn) Disco inferno
(Burn, baby, burn) Burn the mother down
(Burn, baby, burn) Disco inferno, yeah
(Burn, baby, burn) Burn the mother down (Burning)

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Replying to DJKL:
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By carnmores
22nd Feb 2024 13:41

SNF yea!

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By nekillim1000
20th Feb 2024 11:52

What a joke, and Rishi says Starmer 'flip flops' on policy!!!

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JD Portrait
By John Downes
20th Feb 2024 12:02

At least the government listened for once, and changed its mind after falling for a stupid idea. Let's applaud that, rather than criticise.

Thanks (19)
Replying to John Downes:
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By philaccountant
20th Feb 2024 12:20

Continuation of a huge taxpayer funded subsidy to some of the most polluting foreign made vehicles on our roads. Not sure I'd call that a win.

Thanks (20)
Replying to philaccountant:
Should Be Working ... not playing with the car
By should_be_working
20th Feb 2024 13:14

If item A is taxed at a lower rate than item B, then item A is not 'subsidised'... rather item B is overtaxed.

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Replying to should_be_working:
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By GDavidson
20th Feb 2024 13:56

Ah you think all benefits in kind should not be taxed? Yeh let's do away with taxed pay and just all received benefits.

Thanks (3)
Replying to GDavidson:
Should Be Working ... not playing with the car
By should_be_working
20th Feb 2024 15:38

Perhaps they should tax straw men - HMRC would raise a fortune.

Thanks (1)
Replying to should_be_working:
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By carnmores
22nd Feb 2024 13:47

agreed, it's a trade-off like everything else. Pick-up trucks if genuinely used for business shouldnt be taxed. in principle, I do not like paying for something and then being taxed again on that expenditure when I get nothing in return. such is life

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Replying to John Downes:
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By towat
20th Feb 2024 13:03

Maybe next time they could consult before pushing through damaging changes.

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Replying to John Downes:
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By bendybod
20th Feb 2024 15:40

Perhaps they could go one step further in future and, I don't know, consider what the impact is going to be before they announce something. They are a laughing stock for announcing policy changes which then change again when they realise a flaw in their "cunning" plan.

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Replying to bendybod:
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By FactChecker
20th Feb 2024 19:03

If only more people had recognised the visionary genius of Baldrick, he could have been appointed instead of Harra ... with little discernible difference on the practical side, but a greater sense of 'anything is possible'!

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By Open all hours
20th Feb 2024 12:04

Coincidence that the PM has addressed the NFU conference this morning?
On behalf of many rural clients, pleased they can continue to get the most from these capable, efficient, versatile vehicles.

Thanks (15)
Replying to Open all hours:
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By raycad
20th Feb 2024 12:17

Responding to Open All Hours:

TBH, I think I've only ever seen one verifiable farmer in a DCPU! Most of them seem to be spotted outside school gates, restaurants or supermarkets (rubbing shoulders with Chelsea tractors)!

This is crying out for legislative certainty, not something based on a subjective interpretation of "primarily constructed for"; or sometimes contradictory judicial obiter for that matter. Just bring in a new BIK charge for the damn things - something that sits somewhere between a van benefit and a car scale charge would seem fair.

Thanks (11)
Replying to raycad:
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By Open all hours
20th Feb 2024 12:28

We don’t have any ‘verifiable’ farmers without one. Essential kit for people/animals/goods/towing/xcountry capability.

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By DMS
20th Feb 2024 12:46

How can anyone make informed purchasing and investment decisions in this banana republic, when everything is now subject to government whim?

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Stepurhan
By stepurhan
20th Feb 2024 12:55

This U-turn is a complete failure of the government machine.

One of two things should have happened. One, there should have been adequate consultation before the announcement, with the change not being announced if the consultation indicated it should not go ahead. Two, having decided to make the announcement, the government should have stuck to their guns and proceeded as planned.

To do the consulting after the fact and then flip the decision is the worst of both worlds. How on earth is anyone supposed to make sensible business decisions when the rules can change in an instant?

Thanks (13)
Replying to stepurhan:
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By Pam Moreland
20th Feb 2024 15:21

I could not agree more. How many times have we had these types of U turns in the past decade? OK this was slightly different in that this was prompted by the Court of Appeal decision rather than the publication of a change that was then quickly refuted. However the fact remains that it is generally a good idea to actually think about the implications first before announcing a new policy.
Unfortunately people are very divided on these vehicles. Yes they are polluting, big and cumbersome. But in rural areas and for a lot of businesses they are a very practical solution. However where there is a perceived 'tax break' the loophole is exploited and in some cases abused. Short of checking what every vehicle is actually used for and then assessing it as a car or commercial vehicle (nightmare) there really is no alternative.
I have wasted quite a bit of time reading the new guidance issued last week and putting together a new factsheet for our clients only to have to scrap that as well. Thank goodness it isn't January when I really couldn't afford to waste any time. So much for trying to be proactive!

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By JustAnotherUser
20th Feb 2024 13:10

"after listening to concerns"....

very fitting they can pick and choose what and when to u-turn with. Plenty of concerns raised over the last decade on MTD.

I'm sure there's a quote about follow the money and you'll get to the real string pullers here.

Thanks (13)
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By Tom+Cross
20th Feb 2024 13:55

I'm surprised that, any of us, are surprised.
The present administration is well over due, for change, and the potential, future, administration, will simply repeat the same style, in one form or another, as we have now.
Is that really, truly, how democracy is expected to perform?

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Replying to Tom+Cross:
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By bendybod
20th Feb 2024 15:44

As a friend in another jurisdiction commented to me very recently, it really is just a race to the bottom in the governmental elections of pretty much every so called developed country at the moment.

Thanks (1)
Replying to bendybod:
paddle steamer
By DJKL
20th Feb 2024 16:56

Why should HMG be any different to the private sector, software gets released and early users point out the bugs whilst in a similar way HMG floats a policy to gauge reaction then pushes on or drops.

I find it refreshing that politicians recognise they are intellectually challenged and let the wider public make their decisions for them.

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Replying to Tom+Cross:
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By farrcorfe
21st Feb 2024 17:02

Ah, but as history has taught us, Democracy is merely a theoretical concept, just like Communism et al. Capitalism is, however, an economic concept as most countries have discovered.

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By JCresswellTax
20th Feb 2024 13:58

They change their mind more than VAR

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Replying to JCresswellTax:
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By FactChecker
20th Feb 2024 14:26

Aaaah, sleepless night ahead now, thanks ... dreaming of being forced to watch slo-mo replays of the decision-making 'process' (and from multiple angles)!

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Replying to FactChecker:
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By bendybod
20th Feb 2024 15:46

Can you imagine if it were TMO. The clock would be stopped so much we'd still be in 2012.

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By Paul Crowley
20th Feb 2024 14:41

Does any double cab pick up really do business miles? They all seem to have the glass top load cover, and have never seen a tool or building materials.

Either way it would appear that HMRC opinions on tax really are just that. No law was changed, and no legislation is needed.

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Replying to Paul Crowley:
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By bendybod
20th Feb 2024 15:48

The ones that my clients use do - and they aren't farmers and so they aren't necessarily muddy as someone else suggests they should be.

Thanks (1)
Replying to Paul Crowley:
paddle steamer
By DJKL
20th Feb 2024 17:02

I have a work acquaintance who build houses and uses his for his site visits, I can see the benefit as when I last visited one of his sites his pickup was right up a muddy track where the road construction works were happening, my 4x4 Mini Countryman was 300 yards back as would never have got through the mud and I accordingly waded that stretch in my green wellies. (Still, he does drop kids at school from it when setting out for the day)

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Replying to Paul Crowley:
By Ruddles
21st Feb 2024 10:21

Paul Crowley wrote:
Does any double cab pick up really do business miles?

In a word - yes.
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By Ken Moorhouse
20th Feb 2024 15:05

If they are caked with mud, let them qualify as vans, otherwise it's taking the biscuit.

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By AK Employment Tax Services
20th Feb 2024 15:12

But to avoid confusion a double cab only qualifies for the van benefit in kind if the kerb weight is sufficient.

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By Ken Moorhouse
20th Feb 2024 15:13

.

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Glenn Martin
By Glenn Martin
20th Feb 2024 15:15

A good U turn at last.

Where I live in Northumberland about 80% of grafters have double cabs, and the lads in the boozer were going nuts on Sunday about it and pending crash in prices of the Hilux and Rangers parked outside.

It would have been a big tax hit on tradies and farmers etc so I am pleased its not going ahead.

They asked me what I could do about, do you think I could take credit that my tweet to Rishi got the U Turn could be worth a few pints of Caffreys in the pump for me.

I regullarly use the tonne payload in my Ranger carrying my laptop and client books.

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By Rob Swan
20th Feb 2024 15:20

HMRC's new training video on this.... some practice may be required! ;)

https://www.youtube.com/watch?v=NlaQGCr0dfI

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Replying to Rob Swan:
paddle steamer
By DJKL
20th Feb 2024 17:09

Easy, I once slid a Volvo 345 sideways through a farm gate without a scratch, suspect could have tried 100 times and never again managed , but currently one for one as have not been stupid enough to broadside a car from the road since then (It was a long time ago and I was quite young and vastly overconfident)

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By petestar1969
20th Feb 2024 16:02

Pah ha ha ha ha!

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By mydoghasfleas
21st Feb 2024 09:04

Environmental arguments aside.

Aren't these sort of changes meant to have a financial impact statement made before they are introduced. Quite clearly the farmers, who were identified as one of the groups kicking off about the change in policy were not considered when the financial impact statement was/was not made.

It was yesterday's early evening news that it clicked, Rishi Sunak (still a Norman Wisdom looky likey) is doing the rounds at the NFU conference and making, "farmers are not in farming to make a profit" statements for the TV cameras. Actually, most farmers are in it to make a profit but finding it difficult to make a profit from farming not helped by the policies replacing CAP (CAP was bad enough) that seem to be geared to the number of daisies on field borders and "rewilding".

YOU DO NOT NEED TO READ THE FOLLOWING IT'S NOTHING TO DO WITH TRUCKS BUT IS ME VENTING

Unfortunately, the re in rewilding does not appear to be returning to its former wild state but a sort of fairyland idea. With the downlands, the down comes from dun meaning hill from some post Roman language in south east England, were the rewilding back to a former state there would be woodlands with a high beech incidence, but what we get is scrub heaths because the native species of cover were pushed away as land was enclosed 700 years ago. As far as I can see the policy consists of throwing in a handful of wild seeds and seeing if beaver reintroduction might work.

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By AndrewV12
21st Feb 2024 10:51

Lobbyist, Lobbyists, lobbyists

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Replying to AndrewV12:
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By Red1960
21st Feb 2024 12:49

The most sensible, and illuminating, comment this thread.

Is the UK a democracy or is it run by and for the benefit of corporate interests?

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