Double cab pick-up trucks will be treated as company cars for the purpose of benefit-in-kind (BIK) tax and capital allowances from April 2025.
Currently, double cab pick-ups that can carry more than 1 tonne are typically classified as commercial vehicles. This has allowed lower Benefit-in-Kind (BiK) tax rates. However, significant changes are on the horizon which are expected to increase the tax burden on drivers and businesses.
From April double cab pick-ups will be re-classified as company cars, affecting BIK rates and capital allowances.
Here are the key points:
Benefit-in-Kind (BIK) Tax: Double cab pick-up trucks will be reclassified as company cars for tax purposes. Meaning, the BIK tax will increase dramatically.
Capital Allowances: These vehicles will also be treated as cars for capital allowances purposes, which could impact businesses using these vehicles.
VAT Treatment: Despite the changes for BIK and capital allowances, double cab pick- ups will still be classified as goods vehicles for VAT purposes if they have a payload capacity of one tonne or more.
Transitional Arrangements: For double cab pick-up purchased, leased, or ordered before April 6, 2025, the previous tax treatment will apply until the earlier of disposal, lease expiry, or April 5, 2029.
The road ahead…
The full impact of these changes is still unclear. However, it is safe to say that individuals and businesses need to get ready for the new rules.
As April gets closer, here are some steps to consider:
Learn the New Rules: Make sure you know HMRC’s new classification criteria to see if your pick-up will be affected.
Re-evaluate Your Vehicle Choices: Think about your needs and look at other vehicle options.
Get Professional Help: Talk to a tax advisor to fully understand the changes.
Stay Updated: Keep an eye on news from HMRC about these new rules.
HMRC have published this article – EIM23151 – Car benefit: double cab pickups 6 April 2025 onwards
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