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double-can truck | accountingweb | double cab pickups 1 July 2024 onwards car not van
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Double-cab vans no longer pick up tax benefits

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HMRC has updated its guidance on the treatment of double-cab pickups for income tax, meaning that these vehicles will be classed as cars not vans.

16th Feb 2024
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HMRC has revisited the interpretation of the treatment of double-cab pickups for income tax purposes in light of the Court of Appeal decision in Payne & Ors (Coca-Cola) vs R & C Commrs (2020).

With effect from 1 July 2024, HMRC has updated the guidance in its employment income manual, effectively enforcing a less preferential treatment of double-cab pickups for benefit in kind (BIK) purposes. Although the relevant legislation hasn’t actually changed, the update confirms HMRC’s belief that most vehicles of this type do not escape the car classification for employment income tax purposes.

Double trouble

According to employment income manual (EIM) 23100, a double-cab pickup normally has:

• a front passenger cab that contains a second row of seats and is capable of seating about four passengers, plus the driver

• four doors capable of being opened independently, whether the rear doors are hinged at the front or the rear (two-door versions are normally accepted to be vans), and

• an uncovered pickup area behind the passenger cab.

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Replies (44)

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By More unearned luck
16th Feb 2024 18:03

The photo is of a single-cab pickup!

Thanks (12)
Replying to More unearned luck:
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By FactChecker
16th Feb 2024 19:07

Good spot ... which took me to a little light browsing, where I discovered an article from last year that suggests the owners of these (at least any made by Ford) may have an even nastier shock waiting around the corner for them:
https://interestingengineering.com/transportation/ford-will-make-driving...

It's a classic of how technology will help some, whilst literally incapacitating others.

Thanks (3)
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By Waves
17th Feb 2024 07:43

No mention of the change to capital allowances? It’s a double-whammy.

See https://www.rossmartin.co.uk/sme-tax-news/7493-order-your-double-cab-pic...

Thanks (5)
the sea otter
By memyself-eye
17th Feb 2024 14:52

Trying to understand this: Do current owners of DCPU's get to rely on the transitional arrangements?
I read it that they do.

Thanks (0)
Replying to memyself-eye:
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By FactChecker
18th Feb 2024 11:36

Yes ... and not just current owners.
The transitional arrangements apply to any such vehicle bought prior to 1 July 2024!
Although strictly speaking it's not the date of purchase .. it is the date of "assessing the vehicle as a whole at the point that it is made available".

Note: transitional arrangements are, fairly obviously, not forever - they last only until the earlier of disposal, lease expiry, or 5 April 2028 (as I now see Amy said).

Thanks (3)
Replying to FactChecker:
the sea otter
By memyself-eye
18th Feb 2024 14:29

Thanks- it means my son can hang on to his 2018 Ford Ranger for another 3 years - when it will be 9 years old anyway (and worth peanuts anyway!)
For him it's an essential business tool - towing large catering trailers.

Thanks (1)
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By CJaneH
18th Feb 2024 18:19

Probably about time soon At my tennis club I see these vehicles in glossy black, no scratches and as clean as a whistle. No signs that the pick up part has any rough use.

Thanks (3)
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By PAULLEWISFCCA
19th Feb 2024 09:38

Mafia changes guidance so it can try and extort more money from the slaves....

But they cant even answer the phone.

Thanks (9)
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By towat
19th Feb 2024 09:41

So is the BIK calculated on the list price Excluding VAT?

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Replying to towat:
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By rtrussell01
19th Feb 2024 10:28

The price includes "any relevant taxes" (ITEPA 2003 s123 ) which is then defined in Section 171 as "means any value added tax" so HMRC will likely insist on using the gross list price. You could have fun arguing that the VAT is not a relevant tax in this case since it can be reclaimed at the point of purchase, but throwing in the catchall word "any" sways it the other way.

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Replying to rtrussell01:
By Ruddles
19th Feb 2024 13:39

Although it is not explicitly said so in the legislation, the general intention behind the BIK code is to tax the employee on the value of the benefit in not having to pay for it himself. In that sense it is therefore reasonable to use the VAT-inclusive price in determining the assessable benefit.

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By AndrewV12
19th Feb 2024 09:43

okay CALL ME A PLONKER .... .that's quite enough,

Soooooooo as I understand it from 1 July 2024, double cabs pick ups (4 door), do not attract 100% relief for capital allowance purposes, they will get much lower rates allowed to cars.

Thanks (1)
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By GDavidson
19th Feb 2024 10:00

I had a client bought a two door Defender with one row of seats and immediately took it down to a company whose sole work consists of putting in rear seats and doors and moving the bulkhead back. With still the original invoice showing he bought a van he said he would show that to HMRC if it was ever queried. Looking on the website there seems to be lots of companies doing the same work.

Thanks (0)
Replying to GDavidson:
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By KenKLM
19th Feb 2024 10:02

I am sorry but you should report that client if you are aware of the fraud !

Thanks (3)
Replying to GDavidson:
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By Open all hours
19th Feb 2024 10:59

Hope your client reported to modification to the insurer. Potentially more serious position that the tax relief.

Thanks (2)
Replying to Open all hours:
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By unclejoe
19th Feb 2024 12:18

There is another potential issue as well. My son was in a music band that bought a Merc Sprinter "bandvan" - 7 seats and a large van compartment at the rear. No-one thought to check the log book details when they bought it. It had been converted from a three seater van. The implication was discovered at the Swiss border when they were on tour. Their documentation was checked and they were prohibited from continuing with more than three people. They had to hire a car in a panic for the remainder of the tour.

Thanks (3)
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By KenKLM
19th Feb 2024 10:01

Such vehicles are legitimate business use vehicles but have been abused by business owners that fancy the “muscle” car in my opinion and simply using the opportunity to reclaim the VAT and abuse the capital allowances. Too much work for HMRC to investigate proper business use so these people have ruined it for everyone it seems. VAT is usually the main driver for business owners . The capital allowances level out over time .

Thanks (2)
Replying to KenKLM:
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By lam_ac
19th Feb 2024 10:25

Exactly. I think even more so the BIK issue as the cost is PERSONAL whereas the VAT, whist painful is a company cost and subsidised by tax relief.

And to GDavidson's point, I have a situation where (due to an ill-advised, or more accurately non-advised) modification to a commercial vehicle adding seats changed a £3,600 p.a. benefit to closer to 37% of £100k (inc private fuel).

Thanks (1)
Replying to KenKLM:
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By AndrewV12
19th Feb 2024 11:04

I think some clients purchase such vehicles to get a tax refund at year end.

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By JustAnotherUser
19th Feb 2024 10:18

This part irked me...
According to employment income manual (EIM) 23100.....

"is capable of seating about four passengers, plus the driver"

How do have 'about' four? 3 and 5 is 'about' ? why not be specific?

Then I see on the other link... "the Vivaro could be considered a van on fairly narrow grounds – essentially that the second row of seats didn’t span the width of the vehicle"

The Vivaro can have a number of configurations...

https://www.redkite-minibuses.com/vauxhall-vivaro-life/#1489666836918-4f...

So if it has just driver + 2 front seats = Van?
Driver + 2 +2 but doesn't span = van?
Driver + 2 + 3 = Car
Which also means it has 'about 4' but is a van due to the span of the seats...
What about driver + 2 + 6 in the back = bus?

What's the minimum a double cab has to do to be labelled as a van... leave a gap in the back so the seats don't span?

I find this stuff as entertaining as the way F1 cars attempt to skirt the definitions of the rule book to get every advantage they can.

Thanks (0)
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By Mr J Andrews
19th Feb 2024 10:20

About time that these premium passenger vehicles were recognised for what they are. However HMRC's adverbial explanation of the normal occupancy is odd. ''About''four plus the driver. Shall we say four and a half ? Why not say five - which is the capability.
And as for the regular usage of lugging livestock , I doubt any farmer would risk transporting his cows, sheep or pigs in the pickup area.
Who is the highly paid chump for updating HMRC's manuals ?

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Replying to Mr J Andrews:
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By unclejoe
19th Feb 2024 12:30

Here in rural Yorkshire farmers transport animals in pickups all the time! I recall in my youth I had a date with a young lady I had recently met. My car was in for repair and I had to collect her in the farm pickup. "I am sorry about the smell" I said as she got into the front seat that I had spent a couple of hours cleaning. "We have been carrying pigs this afternoon." "Oh" she said, "I thought it was you!"

Thanks (3)
Replying to Mr J Andrews:
By Ruddles
19th Feb 2024 13:35

They may not use them for regular transport of livestock, but it does happen. And they are certainly regularly used by sheep farmers for transporting their sheepdogs.

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By PAULLEWISFCCA
19th Feb 2024 11:41

remember being transported in the back of the local farmers pick up truck holding on to the sides as a child, would that qualify the vehicle as being used to transport goods - given that HMRC appear to believe we are livestock.

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By JD
19th Feb 2024 14:12

Really looking forward to all that marketing over the next few weeks from an assortment of garages trying to reduce their stock levels before the inevitable drop in value.

Thanks (1)
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By TBro4iuABEW6Qmh74nRteQz3
19th Feb 2024 15:19

In other HMRC news, two bald men fight over comb. More on p.94.

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By Ruddles
19th Feb 2024 18:18

You can bin this article now, Amy

Thanks (4)
Replying to Ruddles:
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By FactChecker
19th Feb 2024 18:30

Ooh, what happened?
Prodded by your subtlety, I see that eim23150 has been resuscitated from its short repose in the archives ... and eim23151 has been banished (after an all too brief life)!

But no word on either page as to WHY the change (or indeed admission that a change has been made) ... so do tell if you know more?

I wonder if any seller of these vehicles would have a case against HMRC if they could show how those few days (of what appears to be misinformation) cost them?

Thanks (3)
Replying to Ruddles:
Ivor Windybottom
By Ivor Windybottom
20th Feb 2024 10:12

HMRC's actions remind me of the football chant "You don't know what you're doing!"

Thanks (1)
Replying to Ruddles:
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By Paul Crowley
20th Feb 2024 14:12

No
Keep it as a memento of how crap the UK tax system is. It looks like a exemplar of uselessness

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By Open all hours
19th Feb 2024 21:09

Looks like they’ve found reverse after all.

Thanks (0)
Replying to Open all hours:
the sea otter
By memyself-eye
20th Feb 2024 08:18

Yeah, pity they can't with AML and MTD...

Thanks (2)
Replying to memyself-eye:
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By Open all hours
20th Feb 2024 08:43

Sure is. Maybe we need Farmer Clarkson and Arthur Daley to pursue those matters next.

Thanks (2)
Replying to memyself-eye:
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By Paul Crowley
20th Feb 2024 14:12

If only farmers had complained early enough

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By ireallyshouldknowthisbut
20th Feb 2024 09:14

Does this mean I will be able to get to my local on early doors Friday without negotiating monster trucks?

Absoulute menace those things.

One can only assume their owners are lacking a little something.

Thanks (1)
Replying to ireallyshouldknowthisbut:
the sea otter
By memyself-eye
20th Feb 2024 09:25

Harsh and unfair. My son takes a massive catering trailer to events across the country (Glasto, Silverstone etc). A Transit van won't tow that load and cars are way too inadequate. A DCPU gives him extra 'lugging' capacity and more load space for stock in the vehicle itself. He can also take several staff members to site at the same time.
My own transport is a monster Hyundai i10, but I walk to my local. :-)

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By Open all hours
20th Feb 2024 10:35

Just for the sake of it we have calculated that 11% of our clients run Double Cab PickUps.

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Replying to Open all hours:
By Ruddles
20th Feb 2024 16:49

And of that 11%, what percentage use them for 'genuine' purposes?

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By daz.coad
20th Feb 2024 10:37

HMRC have changed their mind, they are still vans.
They really are not fit for purpose (HMRC, not vans).
https://www.gov.uk/government/news/update-on-hmrc-double-cab-pick-up-gui...

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Replying to daz.coad:
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By PAULLEWISFCCA
20th Feb 2024 10:56

been saying it for a while - they need scrapping (HMRC not the vans)

Thanks (1)
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By PAULLEWISFCCA
20th Feb 2024 10:57

even more tax being extracted from the slaves - its just never enough https://www.grantthornton.com.au/insights/client-alerts/victoria-state-b...

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Glenn Martin
By Glenn Martin
20th Feb 2024 15:16

Dont wish to steal your thunder but the truck in the picture is not a double cab.

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Replying to Glennzy:
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By FactChecker
20th Feb 2024 21:44

Given up reading other responders, Glenn? Try the very first one ...

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