Buying a new business vehicle or residential property?

Let’s look at the UK Autumn Budget announcements that might influence your next vehicle or property purchase:

Business Vehicles

Only 8 months after the reversal of HMRC’s previous attempt to disrupt the pick-up market, the finer details of the autumn budget reveal that the government are now planning to U-turn once again and return to change in certain tax treatments for Double Cab ‘Pick-Ups’.

From April 2025, newly registered Pick-Ups will be treated as ‘cars’ instead of ‘vans’ for the purposes of capital allowances, benefit-in-kind (BIK) and some deductions from business profits.

The existing capital allowances treatment will apply to those who purchase Pick-Ups before April‌‌‌ 2025. Transitional benefit in kind arrangements will apply for employers that have purchased, leased, or ordered a Pick-Up before 6‌‌‌ April 2025. They will be able to use the previous treatment, until the earlier of disposal, lease expiry, or 5‌‌‌ April‌‌‌ 2029.

Best get ordering your new Pick-Up before April 2025, as you will be able to claim 100% of the cost against business profits in the year of purchase – rather than spreading the deduction over multiple years, like cars.

Note however, that the VAT treatment of these Pick-Ups will not change. So, if you are still willing to stomach the hit of additional BIK and much slower capital allowance relief, you will still be able to reclaim VAT on the purchase of Pick-Ups after April 2025.

What other alternatives are there? Whilst they might not be suitable for many business types (and aren’t as fun to drive), the government is maintaining tax incentives to purchase electric cars, as well as extending 100% First Year Allowances for electric cars and chargepoints for a further year.

Residential Property

If you’re a first-time buyer or moving your main residence you can stop reading here, you’re safe. However – if you are planning to buy a second home, a buy-to-let or buying a residential property through a company, you are going to pay more Stamp Duty Land Tax (SDLT).

The UK Autumn Budget announced an increase in the Higher Rate of Additional Dwelling from 3% to 5% for residential properties purchased on or after 31 October 2024. So for example, if you are buying a property worth £500,000 – your SDLT bill has just increased by £10,000. This is a hit that will surely disincentivise property investors, but perhaps stabilise increasing house prices for those unaffected, the first-time buyer and the house mover.