U-turns aren’t always easy in a pick-up truck … unless you happen to be the government, of course!
And although HMRC managed the issue with all the subtlety of an L200 moving at speed across a ploughed field, at least they ended up facing the right direction.
I am of course talking about the announcement that double cab pick-ups were to lose their goods vehicle status and to be treated like cars for capital allowance and benefit in kind purposes, and the spectacular U-turn that occurred just seven days later.
Thankfully, the government acknowledged that the move ‘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’ and quickly rolled back on its original decision in super-quick time.
Based on payload
Originally, the tax regime for double cab pick-ups was based on payload, with anything under one tonne being classified as a car, and anything a tonne and over as a van.
But with double cab pick-ups growing in popularity as a leisure and family vehicle, the government sought to close what it considered to be a loophole of people buying such vehicles through businesses when not needed for work duties.
The change in tax treatment, which was due to come in on July 1, was to be introduced to stop this from happening.
However, lobbying by motoring groups led to the government conducting one of the speediest U-turns in history.
Just seven days after its original announcement, the government rolled back on its pledge and decided to leave double cabs as they are.
Ian Parker, Whitley Stimpson director and agricultural tax expert, said the decision not to reclassify the vehicles was welcomed by farmers.
He said:
“Farming and the construction industry rely on pick-ups to keep moving day in, day out. To reclassify them as cars would have really hit these industries hard. Yes, they have become popular as leisure vehicles, but punishing people who really need them for work because of this would have been unfair. We’re delighted the government saw the pitfalls in this policy before it was too late and took decisive action to sort it out.”
The U-turn ensures a continued and consistent treatment of double cab pick-ups for capital allowances, benefit in kind, and VAT purposes, with pick-ups that have a payload of one tonne or more. Pick-ups with a payload of less than this will continue to be treated as cars.
For tax advice on running vehicles through your business, contact Ian Parker on (01295) 270200 or email ianp@whitleystimpson.co.uk.
Other articles
Spring Budget – Did Jeremy Hunt do enough to reassure farmers?
Judge divorces wedding venue from Business Property Relief (BPR)