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The twin-cab pickup makes a U-turn

In an announcement made on 19 February, the government made a surprising U-turn and confirmed that twin-cab pickup vehicles with payloads of 1 tonne or more will continue to be treated as goods vehicles for both capital allowances and benefit-in-kind purposes.

On 12 February, HM Revenue & Customs (HMRC) had updated its guidance on the tax treatment of twin-cab pickups following a 2020 Court of Appeal judgment. The guidance had confirmed that, from 1 July 2024, twin-cab pickups 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.

The updated treatment was extremely unpopular because goods vehicles attract more beneficial tax treatment than cars. For example, a business buying a goods vehicle is able to claim more tax relief, in the form of capital allowances, than if it were to buy a car. Similarly, if an employee were provided with an employer-owned vehicle, the income tax and employer’s National Insurance charge on the benefit-in-kind would be lower on a goods vehicle than on a car.

The government says that it has listened to carefully to views from the farming and motoring industries and has U-turned because the 12 February guidance update “could have an impact on businesses and individuals in a way that is not consistent with the government’s wider aims to support businesses”.

The U-turn means that that the capital allowances and benefit-in-kind tax treatment of twin-cab pickups with payloads of 1 tonne or more will continue to be aligned with the VAT treatment.

If you have any queries about the tax treatment of your company vehicles, contact one of our accountants today.

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