HMRC Rule Change to Pick-Up Trucks

j_netprofit

Hi all, after a little advice on this matter: https://www.driving.co.uk/news/pick-up-truck-users-face-massive-tax-hike-as-hmrc-changes-benefit-in-kind-rules/

I've had a pick up truck through my business for the best part of 20yrs, regularly upgraded and must have had close to half a dozen over the years.

I was due to upgrade next year but with this rule change, given my double cab requirement I won't be able to.

Can someone please help with the cost implications/differences in having a truck through BIK and as a company vehicle?

Grumpy_chap

This may be better asked in the "Cutting Tax" section of the forum.

From what I have just read in the linked article:

• Current BIK on a double cab pick up is just under £4k, so tax liability of £800 for basic rate payer.
• In the future, these will be treated as company cars, so on the sliding scale based upon list price and emissions.  Much higher tax liability.

The article says there is an exemption to the change for vehicles owned by the end of June this year, out until 2028.
Do you have an option to keep the current vehicle for longer?
Do you have an option to change sooner?

If the BIK benefit on double cab pick ups goes, the options will be a regular van (so keeping the low BIK), a normal car, a pick up and suffer the tax, or an EV (currently very low BIK).
What trade do you work in?  Does it require the pick up, or is that only the choice because of the tax benefits that have been the case?
One can imagine that very few Ranger Raptors are seeing daily abuse on building sites.

DullGreyGuy

jay_ftw said:

Can someone please help with the cost implications/differences in having a truck through BIK and as a company vehicle?

You need to know the list price, fuel type and emissions to be able to calculate the BIK of a "car" 

Taking a Ford Raptor Platinum 3L with no extras as a random example the BIK for a 20% payer goes from £800 to circa £3,437 for the vehicle itself and £151 for fuel to circa £2,057 (assuming employer pays for private fuel)


Personally think its over time, two former neighbours had no professional need for a pickup but selected it as a company car to avoid the tax that a similar car would have attracted. Doubt there are many that truly need a double cab pickup purely for work reasons and most cases the double cab is for its non-work use. 

Herzlos

I can see why since it's been abused pretty bad for cheap tax historically. I know a few people with a truck because it's cheaper, but only 1 who actually needed it for work (tree surgeon).

I'm sure the guidelines mean that if it's got a payload of under 100kg and 4 doors for passenger use, then it's treated as a car rather than a commercial vehicle and taxed as such.

It also seems that it'll apply to a lot of crew-cab vans which is going to be a much bigger nuisance. But then it'll still be cheaper than using 2 traditional vans, or a van + car, to shift 4/5 staff around.

Your only options are to upgrade before the change, get something else or pay the extra tax.

Grumpy_chap

DullGreyGuy said:

Taking a Ford Raptor Platinum 3L with no extras as a random example the BIK for a 20% payer goes from £800 to circa £3,437 for the vehicle itself and £151 for fuel to circa £2,057 (assuming employer pays for private fuel)

I suspect that the pain would be far greater.
It is quite likely that a good proportion of drivers with the double cab pick up at BIK value £4k (£800 tax) remain basic rate even once the BIK is considered.
With the future rules, the £3.5k tax liability is connected to a BIK value £17.5k so far more likely to see that taxed at 40%.  The tax due could increase to £7k.
I am unclear whether the increased BIK also then affects factors such as HICBIC (at £50k threshold) or free childcare and withdrawal of personal allowance (both at £100k threshold).

DullGreyGuy

Grumpy_chap said:

DullGreyGuy said:

Taking a Ford Raptor Platinum 3L with no extras as a random example the BIK for a 20% payer goes from £800 to circa £3,437 for the vehicle itself and £151 for fuel to circa £2,057 (assuming employer pays for private fuel)

I suspect that the pain would be far greater.

Agreed, I just used 20% for consistency as the prior poster had used it... normally I'd assume 40% but then Im too used to company vehicles being a managerial thing and that would normally put you in a higher tax bracket.