THOUSANDS of motorists have been warned of a tax hike in a few months.
HMRC have confirmed they will begin charging double-cap pickup trucks as company cars from July 1, meaning they will lose their commercial vehicle status.
Tweaks to the Benefit-in-Kind tax rules mean that company car motorists face a near-fivefold increase in their personal tax bills, Autocar reported.
Currently, vehicles weighing more than 1,000kg are considered commercial vehicles, allowing business users to reclaim tax on their vehicles and pickup trucks.
HMRC say the move is a “pragmatic way of resolving the primary suitability and classification of double cab pickups”.
Examples of popular double cap pickup trucks include the Ford Ranger Double Cap and the Toyota Hilux.
Employees currently driving pickups as company cars are exempt, and any purchases, leases or orders placed before 1 July won’t be subject to the new rules.
Owners will then have until the lease expires, until they sell the vehicle or until 5 April 2028 to continue to pay the existing BIK tax rates.
Elsewhere, millions of Brits could avoid the upcoming hike in car tax with four handy exemptions, according to one expert.
Vehicle Excise Duty (VED) is set to increase by 10.1% from April 1, seeing the basic rate rise from £165 to £180.
Fortunately, the Government has laid out a number of loopholes that allow a sizeable number of drivers to avoid the brunt of the cost.
Khari Findlay from used car dealership franchise Big Motoring World shared some of the top exemptions to raise awareness among motorists.
First of all, he explained that there is a complete exemption for “historic vehicles”, meaning classic car owners can breathe a sigh of relief.
This is any motor first registered more than 40 years ago on a rolling basis – the cutoff is currently 1984.
Helpfully, these cars are also exempt from MOT requirements and ULEZ or CAZ emissions standards.
Secondly, there is another complete exemption for EVs which was introduced to try and encourage the uptake of zero-emission vehicles.
Any fully electric car is subject to zero road tax.
However, this will not be the case for much longer, with the exemption set to end on April 1 2025.
Any benefit that you can use in your personal time as well as during business hours, such as a vehicle, is considered a perk and HMRC will require you to pay tax, RAC say. The type of tax HMRC requires you to pay is called benefit-in-kind, which is often abbreviated to BIK.
Benefit-in-kind (BIK) are perks or fringe benefits that are given by employers but are not included in the employees salary. They can include company cars, private medical insurance and child care vouchers.
Some benefit-in-kind perks are tax free, for example: free meals, cycle to work schemes and in-house sport facilities. But, other perks will require you to pay tax.
The amount of BIK tax you’ll need to pay is defined by HMRC, which can either be the cash equivalent of the service or goods, or is calculated by specific rules.
One of the most common taxable benefit-in-kind perk is the use of a company car.
