Taxation has obtained confirmation from HMRC that double-cab pick-ups classified as vans for the purposes of the employment income benefit in kind charge will qualify for the 100% annual investment allowance or this year’s temporary 40% first year allowance.
Double-cab pick-ups with a payload of more than one tonne are specifically classified as goods vehicles rather than cars for VAT purposes.
Since 2002/03, HMRC have used the same rule for deciding whether a vehicle provided to an employee is a car or a van, even though the definition in ITEPA 2003, s 115 is different.
It refers to a vehicle ‘primarily suited for the conveyance of goods’.
This practice is published in the Employment Income Manual, paragraph EIM23045.
Although the capital allowances definition in CAA 2001 s 81 uses the same wording as ITEPA 2003, s 115, there is no reference to using the VAT rules to interpret it.
Taxation, aware that some advisers have had claims for AIA or FYA challenged, asked HMRC for a statement.
The department’s press office confirmed that ‘to determine whether a double cab is a car for capital allowances purposes, we follow the VAT rules’.
A reference to this will be included in the Employment Income Manual when it is rewritten for the Finance Act 2009 changes.
