Just a week after announcing a dramatic increase in company vehicle taxation for double cab pickup trucks, the HMRC has made a spectacular U-turn and cancelled the changes.

On 12 February, the government announced changes that would see double cab pickups treated as regular passenger cars for capital allowances and benefit-in-kind purposes.

The rules would see operators of any company vehicles ordered after 1 July 2024 being hit with a tax bill rising from £132 a month for a 40% taxpayer to rates approaching £600 a month for a popular pickup model.

Chief executive of the Society of Motor Manufacturers and Traders, Mike Hawes, described the changes as misguided, explaining that “HMRC’s decision to tax them as cars rather than commercial vehicles for benefit-in-kind (BIK) purposes will raise costs significantly, and make them an untenable choice for many.

“The move risks stalling the overall market and its decarbonisation, as businesses will be likely to hold on to older vehicles for longer. With the new rules due in July, there is insufficient time for industry to adapt to such a major policy change.”

The backlash from the SMMT, the motor industry and those in farming and other sectors has prompted the HMRC to abandon its plan and revert to the existing rules.

“The government has listened carefully to views from farmers and the motoring industry on the potential impacts of the change in tax treatment,” explained the HMRC in a statement, noting that the “guidance update could have an impact on businesses and individuals in a way that is not consistent with the government’s wider aims to support businesses, including vital motoring and farming industries.”

The reversal goes further, with the statement declaring that the government “will be legislating to ensure that DCPU (double cab pickup) vehicles continue to be treated as goods vehicles for tax purposes. The government will consult on the draft legislation to ensure that it achieves that outcome before introducing it in the next available Finance Bill.”

Nigel Huddleston, Financial Secretary to the Treasury, confirmed the move, adding: “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.”

Cancelling the changes ensures generous treatment of double cab pickups able to carry a payload of more than one tonne for capital allowances, benefit in kind, and VAT purposes will continue. Those with payloads under a tonne will be treated as cars, as they are now, and face significantly higher BIK rates and company car taxation.

Phil Huff
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