Tribunal tax decision could have ramifications for double-cab picks ups
Accountancy firm RSM is warning that double cab pick-ups could face increased taxes following a recent tribunal decision.
The tax firm points to a recent First Tier Tax Tribunal decision focused on the first and second-generation Volkswagen Transporter Kombi models – which offer two rows of seating with load space behind – and Vauxhall Vivaro vans. The decision saw Coca Cola dispute NICs paid on BiK for Vauxhall Vivaro and first and second-generation VW Transporter Kombi models run for its employees while two drivers appealed BiK paid on Kombi 2 models.
After looking at all the characteristics of the entire vehicle as provided to the employee, not just at construction, the Tribunal found the Kombis to be cars while the Vivaro was classed as a van.
RSM said in the case of the Vivaro being classified as a van, the over-riding factor seemed to be the significant cargo space available in the middle section, even with the middle seats in place, compared with the VW Kombi.
Now RSM has said the decision could have ramifications for double cab pickups, which are currently classed as vans for benefit purposes if they have a payload of one tonne or more.
RSM is also calling for an urgent update to HMRC tax guidance on determining cars and vans as it warns that employees may fall foul of current “misleading” guidance.
RSM added: “Employers should be mindful when relying on HMRC guidance in determining the taxable benefit arising on a company vehicle, as this may result in unexpected tax bills and possible penalties.”
An HMRC spokesperson commented: “We welcome the First-tier Tribunal’s decision to uphold HMRC’s classification of the VW Kombi Transporter T5 (first generation) and VW Transporter T5 Kombi van (second generation). We are considering the tribunal’s decision in relation to the Vauxhall Vivaro.”