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The Crew Cab Loophole

There's good news and there's bad news....

Firstly the bad news...If you run, or intend to run a Double Cab Pickup through your Company, your will now pay Benefit In Kind Tax (BiK Tax). 

Next, the good news:  The amount of tax you pay will still be much less than a typical “fleety” saloon car.  In fact, it’ll still be cheaper than all but the smallest run-around. 

The Inland Revenue are no fools.  They know that scores of drivers who pay Company Car Tax are swapping their cars for double cab pickups.  Why?  Because a Double Cab is one of the only luxury (many are fitted with plush Leather/Sat Nav/Climate Controlled/Automatic Transmission etc. etc.) 5 seat vehicles classed as a commercial vehicle.  And that means a lower tax bill compared to a regular car. 

All changed on April 6^th 2007.  If you pay Benefit in Kind Tax (BiK Tax) for the perk of your Company “giving” you a pickup, then that tax goes up from the previous £200 a year to £1200 per year.  Although this is a 600% increase, it’s STILL cheaper than running a car.

Here’s how it works:

If your Company gives you a pickup (or any other van) that includes private use, you pay tax on £500 per year.  Which means if you pay tax at 22%, the actual “hard-cash” cost is £110.  Or, if you are a 40% tax payer, the actual “hard-cash” cost is £200.  This applies to Directors, not Sole Traders or Partners, but it does apply to any member of staff.

The £500 taxable amount went up to £3000 on April the 7^th 2007.  Which means the increase is £660 for a 22% tax payer or £1200 for a 40% tax payer.  Better news is that they are still classed as commercial vehicles, therefore you can reclaim 100% of the VAT.  Here at Purple, our “glass is always half full, not half empty” so the following scale should put the increases in some perspective:

Vehicle                                   Tax Bill @ 22%   Tax Bill @40%

Nissan Navara (pre April)              £110                    £200

Nissan Navara (post April)            £660                    £1200

Ford Mondeo TDCi                          £831                    £1512

BMW 325i SE                                   £1591                  £2894

Vaux. Corsa CDTi                           £407                    £741

So…….not so bad, after all!

Glen Newman

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