HMRC will continue to treat double cab pickups as goods vehicles for the purposes of the BIK and capital allowances rules.

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On 12 January 2024, HMRC announced that, from 1 July 2024, it would no longer follow VAT rules in determining if a vehicle is a car for the purposes of the benefit-in-kind (BIK) and capital allowances rules.  

On 19 February 2024, however, HMRC announced that its new guidance would be withdrawn. 

A vehicle is treated as not being a car for VAT if it has a payload of one tonne or more (VAT Notice 700/57). HMRC believed that this approach was no longer sustainable for BIK and capital allowances, following the Court of Appeal decision in Payne & Ors v HMRC [2020] EWCA Civ 889.  

Instead, it was proposed that HMRC would treat a vehicle as not being a car if it was primarily suited for carrying goods. HMRC expected that most, if not all double cab pickups, would be classified as cars due to this change in approach. Transitional arrangements would have applied to preserve the previous treatment for vehicles owned or leased before 1 July 2024.  

However, double cab pickups will now continue to be treated as goods vehicles where they have a payload of one tonne or more. HMRC states that this change was made in response to feedback from farmers and the motoring industry.  

Legislation will be included in a future Finance Bill to ensure that double cap pickups with a payload of one tonne or more continue to be treated as goods vehicles for tax purposes. 

This TAXline article from 2020 looks at the implications of the Payne case.  

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