Drivers face new car tax if their vehicle is deemed to be 'luxury'

Certain drivers could be targeted with a brand-new "luxury" car tax fees amid calls from experts. Specific drivers and motorists could be targeted and slapped with extra car tax charges under major new proposals outlined by experts.

Shoreham Vehicle Auctions (SVA) has suggested a luxury tax on pick-ups valued over £35,000 in a bid to help businesses. SVA MD Alex Wright says customers usually purchase high-value, high-spec pick-up trucks and would be slapped with extra taxation.

But genuine business users would be taxed less under the new rules and policy. He explained: “We want to protect sales and residual values, as well as avoiding penalising staff who drive DCPUs (double cab pick-ups) for business use.

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“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.” Earlier this year the government performed a spectacular U-turn over its decision to treat double cab pick-ups as cars for taxation purposes by dropping the policy just seven days after announcing it.

Nigel Huddleston, financial secretary to the Treasury, said: “We will change the law at the next available Finance Bill in order to avoid tax outcomes that could inadvertently harm farmers, van drivers and the UK’s economy.”

Following the announcement, the SMMT's chief executive, Mike Hawes, tolf Fleet News: “This is a sensible decision and will come as a relief to the many sole traders and businesses, especially in the construction and farming sectors, that rely on double cab pick-ups for their livelihoods.

"Such a move, especially with little notice, would have damaged the market and decarbonisation aims. With the cost of living already high we should be looking at pulling every lever to boost, rather than limit, new vehicle uptake with efficient and zero emission models.”