Historically, HMRC took a pragmatic approach when determining the tax treatment of double cab pick-up trucks (DCPUs), such as the Nissan Navara and the Ford Ranger, classifying these as commercial vehicles, provided they had a payload of at least one tonne.
From April 2025 though, most DCPUs will be treated as company cars for tax purposes potentially meaning higher tax bills for employers and employees alike.
No changes have been made for VAT purposes.
What has changed and what does this mean if you have double cab pick-up trucks?
Benefit in Kind (BIK)
HMRC has updated legislation regarding the classification of DCPUs, with regards to BIK, to be considered as company cars as opposed to commercial vehicles from 6th April 2025.
DCPUs will be moving away from the previously set flat rate of £4,020 for tax year 2025/26 and instead will be subjected to the car BIK rate, which can vary between 2% and 37% based on the CO2 emissions of the vehicle.
From 6th April 2025, electric DCPUs with over one tonne payload will be subject to company car BIK rates (3%), increasing by 1% annually until 2028.
Capital Allowances (CAs)
From 1st April 2025, DCPUs will also be classified as company cars with regard to CAs.
Double cab pick-ups will be moving away from the previous classification as ‘plant and machinery’ for CA purposes and instead will be subjected to the company car rates, which can vary between 6%, 18% and 100%, based on the vehicle’s CO2 emissions.
Are there any transitional rules?
For existing owners of DCPUs HMRC has granted a transitional period, whereby you will have the existing treatment until the earlier of disposal, lease expiry, or 5th April 2029.
These transitional arrangements also provide that any DCPUs ordered before 6th April 2025 will be taxed as a BIK at van rates rather than the more expensive car rates until the end of the lease or 5th April 2029.
If you need our advice on the implications of this tax change please contact us.
