Large Goods Vehicles: Excise Duties
The question
To ask the Chancellor of the Exchequer, what assessment her Department has made of the potential impact of the rules on the taxation of double cab pickup trucks on (a) consumers and (b) rural communities.
Answered by James Murray
Double Cab Pick Up vehicles (DCPUs) are currently treated as goods vehicles for tax purposes, rather than cars, meaning they benefit from more generous tax treatment. A Court of Appeal judgement in 2020 determined that they must be treated as cars for capital allowances and Benefit in Kind treatment under the existing legislation.
The government will apply this judgement, as legislating to reclassify DCPUs as goods vehicles would be a significant tax break costing hundreds of millions per year for these generally higher CO2-emitting vehicles.
The transitional arrangements mean that this will not affect the capital allowances treatment of any business that already owns a DCPU, or that purchases one before April 2025; and businesses that purchase a DCPU after this date will still be able to deduct the cost from their taxable profits at 18% or 6% per year. Under the transitional arrangements for Benefit-in-Kind, anyone who has accessed a DCPU as a company car before April 2025 will not be impacted until the sooner of disposal of the vehicle, April 2029 or when their lease expires.
In addition, there are alternatives to DCPUs (such as Single Cab Pick Ups) that still benefit from the generous treatment as goods vehicles.
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