Following HMRCs announcements of changes last year, and their subsequent U-turn, the autumn budget confirmed that the tax treatment of double cab pick-ups IS changing with effect from April 2025.

Double cab pick-ups have typically fallen under the category of light commercial vehicles, as the legislation that defined a car for tax purposes excluded double cab pick-ups with a payload of one tonne or more, which has historically meant a low Benefit in Kind (BIK) tax.

With effect from 1 April 2025 for companies and 6 April for sole traders or partnerships, HMRC rules are changing, which will result in most double cab pick-ups no longer being treated as vans. From April 2025, they will be reclassified as company cars which means higher benefits and consequently higher tax costs.

For example, based on a higher rate taxpayer:

Vans have been entitled to claim 100% capital allowances write-off where Annual Investment Allowances (AIA) have been available, but this does NOT apply to ‘cars’—this means that the cost of a double cab pick-up will only be written off at 6-18% per annum for corporation tax purposes, depending on the Co2 emissions.

Historically, HMRC have allowed “incidental use” of vans without incurring a Benefit in Kind (BIK) tax charge. Unfortunately, this concession is not available for cars, and as such, even “incidental use” will be treated as private use, therefore incurring an income tax charge.

There will also be a significant increase to the tax charge incurred if private fuel is provided.

What if I already have a double cab pick-up?

If you already have double cab pick-ups in your business prior to April 2025 then the change in rules will not affect you yet, and the current tax treatment will continue throughout the transitional period outlined below.

The transitional period, whereby vehicles in use before April 2025 still qualify for the current tax treatment will finish on the earlier of disposal, lease expiry OR April 2029.

What if I was thinking about purchasing a double cab pick-up?

HMRC has confirmed that only vehicles purchased, leased or ordered* after 1 April 2025 (6 April for sole traders or partnerships) will be impacted by these changes, so if you are looking to purchase or lease double cab pick-ups then you may wish to consider doing so before April 2025 to ensure you can still benefit from the advantageous tax treatment that is currently in place.

The transitional period, whereby vehicles in use before April 2025 still qualify for the current tax treatment, will finish on the earlier of disposal, lease expiry 5 April 2029.

* Where the vehicle has been ordered prior to April 2025 but not made available to the company until post-April 2025, the vehicle will still qualify under the current rules during the transitional period outlined above, but only where the expenditure is incurred before 1 October 2025.

If you would like to discuss this in more detail or have any queries, please get in touch with your usual Jerroms contact.