HMRC U-turn on double cab pickup tax loophole

HMRC has reversed a tax change that would see pickup truck drivers running their double cab as a company car face higher tax bills from July 2024 – just a week after announcing it.

In the original announcement on 12 February, double cab pickups with a second row of seats and a payload of over 1000kg would, from 1 July 2024, be classified as company cars for tax purposes, rather than vans.

Those using double cabs as company cars would pay more Benefit in Kind (BIK) tax as a result of the change. Instead of being a fixed sum of just £3960, it would be based on the vehicle’s list price and CO2 emissions.

This would have bills for both companies and company car drivers increase significantly. Double cabs are typically large, heavy vehicles, meaning they fall into the top 37% Benefit in Kind rate.

Now, however, the government has had a change of heart. On 19 February, it announced the guidance on 12 February would be withdrawn, and the existing van-style arrangements for double cab tax arrangements will remain in place, at least for now.

Why did the government change its mind?

The government changed its mind after hearing “views from farmers and the motoring industry on the potential impacts of the change in tax treatment”.

It acknowledged the changes “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”.

However, added financial secretary Nigel Huddleston, consultation will continue on possible changes to tax rules for double cab pickups in the future.

“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.”

This could mean changes being announced in the upcoming March Budget, although the picture remains unclear.

The tax rules on double cab pickup trucks are being reviewed because they are, in essence, ‘too posh’.

With rear doors and two rows of seats, modern double cab pickups are equally suited to carrying passengers as they are to carrying loads. Some consider them ‘too posh’ to genuinely be van-type commercial vehicles.

What pickup trucks can you buy in the UK?

The market for new double cab pickup trucks in the UK is not as large as it once was. The sector is dominated by the Ford Ranger, which is also available as a Ford Ranger Raptor performance variant.

The new Volkswagen Amarok and Toyota Hilux are strong alternatives to the Ford Ranger, and the Isuzu D-Max is a popular model too.

The Ineos Grenadier Quartermaster is a more recent addition, while the Maxus T90EV is an interesting all-electric pickup.

Then there’s the new Tesla Cybertruck, a glitzy EV pickup on sale on the UK – although there are currently no plans to sell it in Europe and the UK.