Turning full circle – HMRC’s tax treatment of Double Cab Pick Ups

On the 19 February 2024, In perhaps one of the quickest U turns in tax history, HMRC have removed the changes issued in respect of the tax treatment on double cab pickups (DCPUs), which was initially update on Monday 12 February 2024 following a 2020 Court of Appeal judgment.

The guidance had confirmed that, from 1 July 2024, DCPUs with a payload of one tonne or more would be treated as cars rather than goods vehicles for both capital allowances and benefit-in-kind purposes.

HMRC withdraws changes on Double Cab Pick Up (DCPU’s)

The changes have been withdrawn following heavy criticism from the motoring industry and the farming industry. Following said criticism HMRC have accepted that the guidance would have an impact on businesses and individuals in a way that is not consistent with their wider aims to support businesses.

Double Cab Pick Up Tax Treatment

HMRC have confirmed that DCPUs will continue to be treated as goods vehicles rather than cars, and businesses and individuals can continue to benefit from its historic tax treatment. The legislation will be drafted following consultation to ensure that DCPU vehicles continue to be treated as goods vehicles for tax purposes before introducing it in the next available Finance Bill.

DCPU’s and capital allowances

The current treatment which is now set to remain means that for employers DCPUs will continue to be applicable for capital allowances as qualifying plant and machinery available for either Full expensing or AIA. VAT could also potentially be reclaimed on the purchase subject to certain conditions.

Employees that use the DCPUs for private use will continue to be subject to the reduced commercial vehicle benefit in kind rates, which for 23/24 is set at £3,960 multiplied by the employees marginal rate of tax.

Get in Touch

For further information on DCPU’s and tax implications or to further discuss any other tax matters, please contact our tax team who will be happy to help.

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