Drivers and businesses have been offered an olive branch ahead of massive car tax changes launching in April, which could see motorists pay thousands of pounds extra every year.
Double cab pick-up trucks will be reclassified at the start of April when the vehicles will count as cars for certain tax purposes, including capital allowance, Benefit-in-Kind and some deductions from business profits.
Since these vehicles will be treated as cars from April 1 for Corporation Tax and April 6 for income tax, drivers and fleet owners could see their outgoings increase dramatically.
People who drive company cars need to pay Benefit-in-Kind tax, with the most polluting petrol and diesel vehicles potentially paying thousands of pounds.
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HMRC has clarified tax rules for double cab pick-up trucks launching in April
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The most polluting vehicles, including those which emit more than 170g of CO2 per kilometre, have a BiK tax rate of 37 per cent.
Experts have warned that any vehicles transferred between employers could be hit with massive costs, since it would change the tax treatment of the vehicle.
However, a spokesperson for HM Revenue and Customs has now clarified that vehicles will not lose transitional arrangements, according to Fleet News.
They said: "If an employer transfers a double cab pick-up to another employee between April 6, 2025, and April 5, 2029, they may continue treating it as a van for tax purposes, provided there is no disposal, and the lease has not ended."
The 2024 Autumn Statement outlined details of the changing treatment of double cab pick-up vehicles following a Court of Appeal judgement in 2020.
It stated that companies who have purchased, leased, or ordered a double cab pick-up truck prior to the April 6 deadline, will benefit from transitional arrangemenets, regardless of when they take delivery.
The Budget documents clarified that they will be able to use the previous treatment, until the earlier of disposal, lease expiry, or April 5, 2029.
David Chandler, co-founder and director at HRUX, said the clarification from HMRC will be a "relief" for many drivers and businesses.
He told Fleet News: "We welcome the swift clarification from HMRC with regards to the re-allocation rules for double cab pick-ups post April 6, 2025, until the end of the transition period.
"The original stance from HMRC was somewhat understandable given the wording of the guidance, however, on reflection, would have been unfair on employees and employers alike."
HMRC attempted to reclassify double cab pick-up trucks in 2024, which would have seen the vehicles treated as company cars in a bid to reform motoring taxation.
It was described as being a "pragmatic" way of introducing new rules, but motoring experts warned that it could have resulted in companies seeing their bills increase fivefold.
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The Ford Ranger Wildtrak is one of the most popular double cab pick-up trucks FORDThe law change was originally ditched after mass backlash from motorists and organisations, with Paul Hollick, chair of the Association of Fleet Professionals, calling it "embarrassing".
Commenting on the decision to U-turn, Nigel Huddleston, former Financial Secretary to the Treasury, said it would look to make changes when it was suitable.
He added: "We will 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."
