Following concerns raised with the government from the farming sector and motoring industry, it was acknowledged that HMRC’s guidance update would have an impact on businesses and individuals in a way that is not consistent with the government’s wider aims to support businesses.
HMRC have subsequently completed a U-turn and withdrawn their guidance, which will mean that double cab pick-ups will continue to be treated as commercial vehicles rather than cars.
The government confirmed they will look to “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”.
With the agricultural industry forming a prominent part of East Anglia’s economy, the news will be welcome by the region. Eyes will now turn to how the government intend to implement the rules in legislation.
Following several high profile court cases, the classification of commercial vehicles for BIK and capital allowance purposes is currently a grey area and differs from that used for VAT. The prospect is that the tax rules are simplified to ensure certainty for businesses and individuals when buying commercial vehicles.