After fleets admitting confusion over the new rules on double cab pick-up trucks, HMRC has released new guidance in the hopes of clearing up any misconceptions.
In the Autumn Budget last year, the Government announced that double cab pick-up trucks would be treated as company cars for tax purposes. This dramatically increases the Benefit-in-Kind (BIK) tax that drivers have to pay by thousands of pounds.
The initial guidance defined a double cab pick-up as having a front passenger cab that contains a second row of seats and is capable of seating four passengers plus the driver. It also said that the vehicle should have four doors that are capable of being opened independently.
The new guidance removes the need for the doors to be opened independently, which now extends the classification to extended (or super) cabs.
HMRC say that, because these vehicles are equally suited to convey passengers and goods, there is no predominant suitability between car or van. Therefore, they have chosen to classify the vehicles as cars for tax purposes.
This has caused problems within fleets, as many fleet managers have paused their plans to order new double cab pick-ups.
The Government stated that the reasoning behind the change was “to align with case law, reflecting the Court of Appeal’s judgement that multipurpose vehicles which are equally suited to carrying people and goods should be treated as cars.
“It is right that their tax takes into account the purpose for which they are primarily suited.”
The case law being referenced was a ruling by the Court of Appeal involving HMRC and Coca Cola, where HMRC successfully argued that the Vauxhall Vivaro and WV Transporter Kombis were cars and not vans, due to their predominant use as passenger vehicles.
