If you want a new Double Cab pick up you need to order one right now.
From 06 April, HMRC is reclassifying double cabs as cars for benefit in kind tax purposes.
All new double cabs – whether Extra Cab, Extended Cab, Super Cab or King Cab – will be subject to new benefit in kind treatment as cars.
It means that double cabs, which have previously been subject to the flat rate van tax of £3,960 multiplied by the driver’s marginal rate of tax, will now be subject to the car scale charge based on CO2 emissions of up to 37% of the vehicle’s value.
The majority of double cabs have high CO2 emissions placing them in the highest tax band. For example, an Isuzu Double Cab would have a benefit in kind rate of £12,208 multiplied by the driver’s marginal tax rate. In effect the yearly tax bill for a 20% tax payer would jump from £792 a year to £,2442, equivalent to a rise of 208%.
Changes to Capital Allowances
However, the changes go further. For the fleet operator or business owner, whereas once double cabs were considered plant and machinery for Capital Allowances, they are now reclassified for cars, so are no longer eligible for First Year Allowances and the Annual Investment Allowance.
The changes to double cabs are significant. They will cost drivers more in taxation while businesses will receive reduced allowances, commented Mike Manners, Managing Director of CBVC Vehicle Management.
However, there is a transitional period HMRC has put in place, as long as the double cab is ordered before 06 April. If that’s the case, the double cab will be treated as a van for benefit in kind purposes and treated to the plant and machinery capital allowances. But you do need to move quickly.
If the changes are likely to affect you, please speak to your Sales Executive at the earliest opportunity on 01283 351200.
Download our explainer on Double Cabs
Our accountants Johnson Tidsall have produced a guide that explains the changes in greater detail.
