A TAX hike that was set to affect tens of thousands of drivers has been scrapped just one week after it was announced in a stunning U-turn.
The move would have seen double-cab pickup trucks with loads of over a tonne reclassified as passenger cars, meaning owners would have to pay hundreds extra each year.
GettyThe planned tax hike on double-cab pickup trucks has been dumped[/caption]
HMRC announced on February 12 that it would close a loophole in tax regulations covering company cars, known as benefit-in-kind (BIK) tax.
This was based on the fact that the vehicles include a second row of seats, which the agency, citing a High Court judgement, argued would mean they could be used as personal vehicles.
Had the changes gone through, businesses using double-cab pickups would pay BIK based on the emissions of each car in their fleet, rather than a flat rate.
Given the emission rating of most such trucks, this would likely have seen the majority liable for the highest BIK rate, currently set at 37%.
The proposal prompted uproar from farmers and other labour-intensive industries, who argued that they relied on the trucks to make their living.
Just a week later, on February 19, HMRC confirmed it would not go ahead with the changes, which had been set to come into force on July 1.
A statement from the agency said: “On Monday 12 February 2024 HMRC updated its guidance on the tax treatment of Double Cab Pick Ups
“Since then, the government has listened carefully to views from farmers and the motoring industry on the potential impacts of the change in tax treatment.
“The government has acknowledged that the 2020 court decision and resultant 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, including vital motoring and farming industries.
“HMRC have today announced that its existing guidance will be withdrawn.”
And Nigel Huddleston, the Financial Secretary to the Treasury, added: “We will change the law at the next available Finance Bill in order to avoid tax outcomes that could inadvertently harm farmers, van drivers and the UK’s economy.”
However, there was no movement on double-cab pickups with loads under 1,000kg, which were already classified as passenger cars.
Popular models like the Ford Ranger Raptor will still be taxed based on emissions when added to company fleets.
It comes as rural communities face the imposition of a new Taxi Tax, with ministers warned that Brits will face transport hell as a result.