Source:  HMRC

Following the Government’s Autumn Budget 2024 announcements, HMRC has published new guidance regarding a change in the interpretation of how double cab pickup (DCPU) vehicles should be classified for car benefit, capital allowances and some deductions from business profits purposes.    

The current treatment of DCPU vehicles as outlined in Employment Income Manual (EIM23150) was adopted from 2002 and is based on payload. This finely balanced test is inconsistent with the Court of Appeal’s decision in Payne & Ors (Coca-Cola) v R & C Commrs (2020) (BTC19) which established that a narrow margin of suitability is not sufficient to determine that a vehicle is primarily suited for a particular purpose. It also determined, that in cases where a vehicle cannot clearly be identified as being predominantly suited for carrying goods the default should be that the vehicles are cars.    

New guidance for car benefits, part of the Employment Income Tax Manual (EIM23151), explains that from 6 April 2025 HMRC will no longer be applying this payload test to determine whether a DCPU is primarily suited for the conveyance of goods or burden. From that date, a vehicle must be assessed as a whole at the point that it is made available to determine whether the vehicle construction has a primary suitability. The guidance also provides information on the transitional arrangements for DCPUs leased, purchased or ordered before 6 April 2025. 

For capital allowance purposes new guidance is available at Capital Allowances Manual (CA23511) . This explains the change in treatment for expenditure incurred on or after 1 April 2025 for Corporation Tax and 6 April 2025 for Income Tax. It also includes transitional arrangements, in place for contracts entered into before these dates relating to expenditure incurred before 1 October 2025. The updated guidance for deductions from business profits can be found at Business Income Manual (BIM47730) and Business Income Manual (BIM70035).