New Taxation Rules for Double Cab Pickups!

As a result of the Autumn Budget, the Government says it will treat double cab pick-up vehicles (DCPU) with a payload of one tonne or more as a car for tax purposes.

From 1^st April 2025, for corporation tax, and from 6^th April 2025 for income tax, double cab pick-ups will be treated as cars for the purposes of capital allowances, Benefits in Kind (BiK) and some deductions from business profits.

Previously, the BiK for a double cab pick-up was a flat rate charge of £3,960. This resulted in a tax charge of £792 for a basic rate tax payer and £1,584 for a higher rate tax payer.

Following the proposed change, the BiK will be calculated as a percentage of the retail price of the vehicle (incl. VAT). The percentage is based on a sliding scale which is determined by the CO₂g/km³ emissions of the vehicle. Given that most DCPU have relatively high CO₂ g/km³ they attract the very highest band of tax at 37%.

As an example;

A Toyota Hilux 2.8 D-4D Invincible with a list price of £41,960 and an emissions figure of 223 g/km³ would result in a BiK of £15,525. This translates into a tax charge of £3,105 for a basic rate tax payer and £6,210 for a higher rate tax payer – in other words, almost a four-fold increase.
Whilst this is a tax on the employee, companies also have to make National Insurance contributions (Class 1A) on the value of the BiK – again a four-fold increase!

Points to Note;

There is a transitional period which will apply to employers who have purchased, leased or ordered a DCPU before 6 April 2025. They will be able to use the previous tax treatment, until the earlier of disposal, lease expiry, or 5^th April 2029.
Benefits in Kind only apply to individuals who use the vehicle for private use. If the vehicle is only used for business purposes, there is no BiK. Someone who is issued with a DCPU for work purposes will not automatically incur a BiK if they can clearly demonstrate they do not use the vehicle for private journeys – this would probably necessitate them (or their family) owning their own personal vehicle.
Note – travel to and from a regular place of work is regarded as private use.
The changes to capital allowances will certainly impact businesses but more in terms of the timing of tax paid. Regardless, there is still a cost to paying tax sooner, rather than later!
To date, there are no changes to the VAT treatment of DCPU.

Join this petition urging the government to reconsider and reverse these tax changes on double cab pickup trucks.

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