You may have seen in the press last week that HMRC said it would re-classify commercial pick-up trucks as cars, not vans as they previously did.
This change was due to come in to play in July. It would have ended the significant tax-break that business that arguably need to have these vehicles previously enjoyed.
The financial hit on thousands of farmers and small-traders was substantial, with annual bills increasing almost five-fold. To put it in real money, a farmer or other business owner on the 20% tax rate with a Ford Ranger Wildrak as a company vehicle would have seen their annual car tax rise from £792 a year to as much as £3,492.
Now, common sense has prevailed (not something we can always say about our tax authorities) and in a statement HMRC has said: “Following the decision, farmers raised concerns about the risk of unintended harm to agricultural businesses affected.
“The government has listened carefully to views from farmers and the motoring industry on the potential impacts of the change in tax treatment.”
They went on to say that the original proposals were “not consistent with wider aims to support businesses”, and confirmed that double-cab pick-ups will “continue to be treated as goods vehicles rather than cars.”
Nice to see HMRC responding quickly for once….
Ashley Marshall, M&S Accountancy and Taxation
