Taxation of double cab pickups and combi vans

In a Court of Appeal (CA) ruling dated 20 July 2020, the court ruled that three types of modified crew cab vehicles are cars rather than vans.

This ruling concerns a long running case between Coca Cola UK and HMRC relating to two different types of VW Transporter  and a Vauxhall Vivaro.

Coca Cola argued that all 3 vehicles were vans and hence first year allowance could be claimed on their purchase .The benefits in kind on the vehicles users would be substantially less than if they were taxed as cars.

The First Tier Tax Tribunal concluded that the VW Transporters were cars and the Vivarro was a van. The Upper Tier Tax Tribunal reached a similar conclusion. The case was then taken to the CA, which concluded that all 3 vehicles should be taxed as if they were cars.

There has been no change in the tax legislation relating to this matter, it is however the courts interpretation of the legislation which has changed.

It would appear that this case does not apply to double cab pickups, which are still treated as vans. We would expect that future changes will be forthcoming from HMRC, so as to ensure that tax treatment of double cab pickups becomes consistent with that of crew cab vehicles having 2 rows of seats.

Consequently it will no longer be possible to claim first year allowances on the purchase of such vehicles and benefits in kind on the vehicles will be much higher.

Interesting the VAT treatment of these type of vehicles has not changed and hence VAT can still be claimed on the purchase of the vehicles.