Double-cab pick-up vehicles are set to lose their standing as business autos in relation to paying firm automotive tax.
Massive modifications to the benefit-in-kind (BIK) guidelines will imply that company car drivers will face a near-fivefold enhance in private tax payments for any such pick-up bought from 1 July 2024.
Currently, any pick-up that meets the factors of getting a payload of greater than 1000kg (or 1045kg with a hardtop put in) is taken into account a business automobile.
This is consistent with the present VAT guidelines, permitting enterprise customers to reclaim tax on vans and pick-ups.
From 1 July, HRMC will abandon the payload-based definition and deem any pick-up with a second row of seats as appropriate for personal use and due to this fact a automotive.
Due to beneficial VAT and BIK taxation, the UK is likely one of the largest markets in Europe for pick-up vehicles.
The Ford Ranger is the nation’s best-selling instance, with 18,679 registrations for a 45.5% market share in 2023.
The hottest Wildtrak variant with a 2.0-litre diesel engine has a primary listing value of £47,220 together with VAT. Under the brand new guidelines, its 230g/km CO2 emissions place it within the high BIK taxation group of 37%.
A 20% taxpayer in England will due to this fact must pay £291 per 30 days and a 40% taxpayer £582 per 30 days in BIK tax for having it as a firm automotive.
This compares to a flat charge of simply £60 per 30 days for 20% taxpayers or £120 per 30 days for 40% taxpayers at current.
There are exceptions that can imply any double-cab pick-up that is completely modified to make it appropriate for business use by eradicating the seats and fittings (in addition to changing the rear glass with fibreglass or steel panels) will nonetheless be thought-about as a business automobile.
The guidelines will not be backdated to cowl staff at the moment driving pick-ups as firm vehicles, and any purchases, leases or orders positioned earlier than 1 July will not be topic to the brand new guidelines.
Owners will then have till the lease expires, the automobile is offered or 5 April 2028 to proceed to pay the prevailing BIK tax charges.
Of the pick-ups at the moment on the UK market, the KGM Musso, Maxus T90EV and Volkswagen Amarok do not supply a single-cab variant.