'Luxury' tax on expensive pick-up trucks suggested

Date: Monday, April 29, 2024 | Author: Sean Keywood

A new tax on pick-up trucks that cost more than £35,000 excluding VAT has been proposed by Shoreham Vehicle Auctions (SVA).

The company has called for key industry stakeholders to work closely with HMRC to shape new legislation, after the events of February when a new policy of taxing double-cab pick-ups as company cars was first announced, then withdrawn.

SVA said it had consulted with dealers, fleets, and SMEs before announcing its ‘luxury’ tax proposal, which it said would designate expensive pick-ups as being recreational rather than business vehicles.

SVA MD Alex Wright said: “The industry must consult with HMRC to get the right decision over the line.

“HMRC is looking to settle a taxation issue that has been bubbling for more than two decades. It wants to get rid of the grey areas that are in place that encourage tax avoidance which we can understand.”

According to SVA, its proposal would also keep rental and leasing companies happy as it would protect residual values of business vehicles and help them predict future values more accurately.

Wright said: “We want to protect sales and residual values, as well as avoiding penalising staff who drive DCPUs for business use.

“Leasing and finance companies shouldn’t have to pay for the cost of HMRC policy changes. If a future date is confirmed to roll out new legislation, risk managers can plan accordingly to make the right decisions for their companies and not have to make provisions for residual value losses when disposing of existing stock.

“Companies are investing in DCPUs to safely carry people, equipment and tools. We don’t want a situation where HMRC taxation might compromise work efficiency and safety.”

Wright said that he would welcome any feedback to the tax proposal, and being part of any industry group consulting with HMRC.

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