Question to the HM Treasury:

To ask the Chancellor of the Exchequer, with reference to paragraph 5.91 of the Autumn Budget 2024, published on 30 October 2024, what assessment she has made of the potential impact of changes to the treatment of double cab pick-up vehicles on (a) SMEs, (b) the self-employed and (c) people who work in the construction industry; and what estimate she has made of the number of taxpayers impacted by those changes in 2025-26.

Double Cab Pick Up vehicles (DCPUs) have in the past been treated as goods vehicles for tax purposes, rather than cars. Following a judgement by the Court of Appeal, DCPUs must be treated as cars, rather than goods vehicles, for certain tax purposes, based on their primary suitability.

At Autumn Budget 2024, the government had to make difficult decisions, and in the given fiscal situation was not willing to legislate to change this treatment and provide a significant tax break worth hundreds of millions per year for these vehicles.

The transitional arrangements put in place meant that this would not affect the capital allowances treatment of any business that already owned a DCPU, or that purchased one before April 2025; and businesses that purchase or have purchased a DCPU after this date will still be able to deduct the cost from their taxable profits at 18% or 6% per year. Under the transitional arrangements for Benefit-in-Kind treatment, anyone who accessed a DCPU before 6 April 2025 will not be impacted until the sooner of disposal of the vehicle, 5 April 2029 or when their lease expires.

In addition, there are alternatives to DCPUs (such as Single Cab Pick Ups, or 4x4 vans) that are still treated as goods vehicles.