Fleet News

Fleets wait as VAT policy review is put on hold

GOVERNMENT legislation to review its VAT policy on commercial vehicles has been postponed at the 11th hour and will now not come into force until at least next year. Many fleet operators saw potential savings of thousands of pounds in tax bills as a result of a proposed change to the VAT policy, which was due to come into effect next month but will not now be considered until December at the earliest.

Without giving a reason, the Government has announced that it is deferring the review which would bring it in line with a European Commission directive to alter the definition on what makes a pick-up a commercial vehicle and not a car. Currently, any double-cab with rear windows and a second row of seats is classed as a car, and VAT-registered operators cannot reclaim the VAT as they can with vans and single cab pick-ups.

News that this system could be changed by Customs & Excise next month led to predictions that the double-cab market could rocket as small firms took advantage of the vehicle's load-carrying capabilities and passenger-carrying practicality. It was expected that next month the changes would become legislation and any pick-up with a payload of 1,000kg or more would become classed a commercial vehicle, irrespective of whether it was a double cab or not.

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