You may have read the recent article on proposed changes to the tax treatment of Double Cab Pickups (DCPUs). Since then, and following its publication on 12 February to update the Employment Income Manual, and specifically EIM23151, HMRC, have now issued new guidance on 19 February which suggests these changes will now not take place and have archived the original guidance. However, please speak with your accountant or other financial / tax advisors, so you are fully up to date with the changes. This article has some more information on HMRC’s latest position and this tax benefit.
What’s the situation now?
Following significant feedback from various industries, HMRC has announced that its proposed changes, which would have impacted a significant number of FMB members, is to be withdrawn and DCPUs will continue to benefit from the existing tax treatment.
The Government will now need to consult on draft legislation required to make the necessary adjustments ahead of it being included in the next available Finance Bill.
What does this mean for me?
The taxation on benefit-in-kind associated with providing vehicles to employees will remain unchanged, as will the capital allowances available in the first year of use for businesses purchasing such vehicles for trade purposes. This ensures consistent and favourable treatment of Double Cab Pick-Up (DCPU) vehicles regarding capital allowances, benefit-in-kind, and VAT within the tax system, promoting simplicity.
This update specifically applies to DCPUs with a payload exceeding one tonne; those with a payload of less than one tonne will continue to be treated as cars.
Where can I find more information?
There is more information via the HRMC website and other articles and your accountant or tax advisor may also be able to provide updates.
Would you have been affected by these changes?
Get in touch and share your thoughts or how these changes could affect you and your business.
Authors
Iain Kirtley
With over 20 years’ experience of membership bodies, not for profit organisations and the private sector, Iain joined the FMB in August 2023 from the Chartered Institute of Building where he worked with construction companies of all sizes to support them with training, development and accreditation.
