Until the last Budget, HMRC had a very specific view of whether a vehicle was a car or a commercial vehicle (a van, in short). In their view:
Historically, twin cab pickups with a payload exceeding 1 tonne have been treated as commercial vehicles/vans.
The last Government proposed to change the status of Twin Cab Pickups from commercial vehicles to cars. Following an outcry from the industry this decision was reversed in February.
In the Budget last month, the new Government have decided to go ahead with the change.
From 6 April 2025 ALL newly leased or purchased twin cabs (not just those with a payload of more than 1 tonne) will be treated as cars for Benefits In Kind and Capital Allowances.
There are some arrangements to ensure that existing company vehicles don’t jump from vans to cars overnight.
1. The existing Capital Allowances position will apply to all those purchased prior to 6 April 2025.
2. Transitional BIK arrangements will apply for those vehicles purchased prior to 6 April 2025, with the employers being able to use the existing treatment until the earliest of
i) disposal,
ii) lease expiry or
iii) 5 April 2029
There has been no announcement as yet on the VAT position but we would expect this to follow the direct tax position.
If you have any questions regarding these changes, please don’t hesitate to contact us.