We know that providing company cars is not at the top of any charity’s list, but many charities involved in managing the natural environment do use their own vehicles. We are therefore highlighting a change in HMRC guidance on the benefits in kind associated with double cab pick ups (or DCPUs). In line with that guidance, such vehicles will now be treated as cars instead of vans following a Court of Appeal ruling [Payne & Ors (Coca-Cola) v R & C Commrs (2020) (BTC19)]. This will apply for any new vehicles ordered from April 2025, or any vehicles purchased before that date but still owned as at April 2029.

It is important to note that the new treatment impacts Benefits in Kind and Capital Allowances, but not VAT or Vehicle Excise Duty (VED) where the rules remain unchanged. Payload over 1 tonne being a van for VAT purposes (VIT56600). This is important for charities who are entitled to a full VAT refund on these vehicles.

Many charities will treat these as pooled vehicles which means that there is no benefit in kind regardless of whether they are classified as vans or cars. However, given the uptick in benefit in kind, it may be worthwhile reviewing usage to check that you are still complying with the requirements of pool vehicles. Where charities are looking to order new vehicles which qualify as vans for benefit in kind purposes, HMRC’s guidance indicates that they consider that if a vehicle has side windows behind the driver and passenger doors, it is still a car, even if there are no back seats. So, if relying on a new vehicle being treated as a van, a belt and braces approach is to ensure that there are no back windows or seats fitted.