Big Changes for Double Cab Pick-Up Truck Tax Rules
The rules for double cab pick-up trucks are changing, and businesses must prepare for the impact on their tax liabilities. Starting April 2025, the UK Government will classify double cab pick-ups with a payload of one tonne or more as company cars for tax purposes. This decision, hidden in the small print of the Autumn Budget, will significantly increase the Benefit-in-Kind (BIK) tax for drivers and employers alike.
What’s Changing?
Previously, double cab pick-ups were treated as vans for tax purposes, offering lower BIK rates. Under the new rules:
- From April 2025, double cab pick-ups will be taxed as cars for capital allowances, BIK, and certain business profit deductions.
- Existing capital allowances will continue to apply for vehicles purchased before April 2025.
- Transitional arrangements allow businesses to use the current treatment until April 5, 2029, or until the vehicle is disposed of or its lease expires.
Why This Matters
This change will dramatically increase costs for businesses and employees:
- Higher BIK Costs: Cars are taxed at a higher rate than vans. For example, a Ford Ranger with CO2 emissions above 170g/km and a list price around £48,000 would fall into the 37% tax bracket. That’s £7,110 per year in BIK tax for a 40% taxpayer compared to the current fixed van benefit of £3,960.
- Greater Income Tax and National Insurance Liabilities: Both employers and employees will face higher tax burdens on double cab pick-ups.
A History of Debate
This decision follows years of discussion about the classification of vehicles for tax purposes. A landmark case involved Coca-Cola, where HMRC successfully argued that the Vauxhall Vivaro and VW Transporter T5 Kombis were cars, not vans. This case, along with growing scrutiny of vehicle classifications, led to the current changes.
How Trio Leasing Can Help
Navigating these tax changes can be challenging, but that’s where Trio Leasing comes in. Our team is here to help businesses understand the implications and make informed decisions about their fleets.
- Expert Guidance: We can help you determine how these changes affect your business and employees.
- Tailored Leasing Solutions: Whether you need alternatives to double cab pick-ups or are exploring tax-efficient vehicle options, we’ve got you covered.
- Long-Term Planning: With transitional rules in place until 2029, we’ll help you make strategic decisions that align with your goals.
Need Advice?
If you have questions about the new tax rules or want to explore options for your fleet, contact the Trio Leasing team today. We’ll provide clear, actionable advice to ensure your business stays ahead of the curve and your vehicles remain the perfect fit for your needs.
