HMRC change benefit in kind rules for double cab pickups.

Article | Kate Millard | 15th February 2024

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*This decision has now been U-turned. Read Kate Millard’s update on our website. 

Earlier this week, HMRC quietly updated the benefit in kind rules for employees and directors provided with double cab pickups by their employer.

Previously, when calculating benefits in kind, HMRC have interpreted the meaning of ’car’ and ‘van’ according to the VAT definitions, which define double cab pickups with a payload of 1,000kg or more as vans, not cars. This led to generally lower flat-rate van and van fuel taxable benefits arising compared to company car and car fuel benefits, as these are calculated based on a vehicle’s list price and C02 emissions. The rules surrounding private use also differ, as no taxable benefit usually arises for a van where there is insignificant private use, whereas a company car benefit arises where a car is made available for private use.

HMRC have changed their internal guidance on this, in response to the recent “Coca-Cola” Court of Appeal tax case. These changes will come into effect from 1 July 2024.

From 1 July 2024, the classification of a double cab pickup for benefit in kind purposes will be based on an assessment of each specific vehicle to determine whether it’s construction is “primarily suited for the conveyance of goods or burden of any description”. HMRC expect that “from 1 July 2024, most if not all double cab pickups will be classified as cars when calculating the benefit charge. This is because typically these vehicles are equally suited to convey passengers and goods and have no predominant suitability.” However, current HMRC detailed guidance on how to determine a vehicle’s suitability is not drafted with such certainty.

Are there any transitional provisions?

Don’t worry – there will be transitional arrangements for employers who have purchased, leased, or ordered a double cab pickup before 1 July 2024.  In such cases, employers can rely on HMRC’s previous guidance until the earlier of disposal, lease expiry, or 5 April 2028.

Act now

If as employer you provide double cab pickups to employees or directors, we recommend that you review your current arrangements as soon as possible within the transition period and take any action required.

If you have any questions, you can contact one of our Employment Tax team or your usual PEM adviser.

This article was correct at time of publication.

About the author

Kate Millard

Kate joined PEM in 2008 and was promoted to Director of Employment Taxes in 2011.