New Double-Cab Pickup Tax Rule
Does your business own a double-cab pickup vehicle?
These trucks are very popular in construction and farming. For over 20 years, they have been classified as goods vehicles for tax purposes. From April 2025, this will change.
The guidance confirms that, from next April, double-cab pickups (DCPUs) with a payload of one tonne or more would be treated as cars rather than goods vehicles.
Business owners using DCPUs as company vehicles have enjoyed the flat commercial vehicle rate of Benefit in Kind (BiK) tax. This advantage disappears under the new guidance. Treating the vehicles as cars for tax purposes involves significantly higher BiK tax rates reflecting vehicle emissions and price.
One of the most popular DCPU vehicles, the Ford Ranger, currently attracts a flat annual rate of £792 per year in BiK tax (40% taxpayers would pay £1,584).
When treating this vehicle as a car, Its emissions place it in the top company car tax bracket. This means that from April 2025, 20% taxpayers will pay a tax bill of around £2,100 (40% taxpayers will pay £4,100).
The new rules apply from 1 April 2025 for corporation tax and 6 April 2025 for income tax. Some transition relief exists: Any vehicles already being used or ordered before April will be subject to the existing classification until disposal, lease expiry, or 5 April 2029 (earliest applies).
Does this ruling affect your company?
Discuss your business circumstances with the friendly experts at Hargreaves Owen without obligation. We’ll minimise your tax liability and ensure your business is compliant. Let’s talk.