Starting from April 2025, significant tax changes will affect double cab pick-up trucks in the UK.
These vehicles, previously classified as commercial vehicles, will be reclassified as passenger cars for tax purposes. This reclassification impacts capital allowances and Benefit-in-Kind (BIK) taxation.
Key Dates:
•1 April 2025: For corporation tax purposes, double cab pick-ups will be treated as passenger vehicles.
•6 April 2025: For income tax purposes, double cab pick-ups will be treated as passenger vehicles.
Implications:
•Capital Allowances: Currently, businesses can claim full capital allowances on double cab pick-ups, treating them as plant and machinery. After 1 April 2025, these vehicles will be subject to car capital allowance rates, which vary based on CO₂ emissions.
•Benefit-in-Kind (BIK) Taxation: Presently, double cab pick-ups are subject to a flat BIK rate (£3,960 annually). Post 6 April 2025, BIK rates will align with those of passenger cars, calculated on a sliding scale based on CO₂ emissions. Given the typically higher emissions of these vehicles, this change could substantially increase tax liabilities for employees using them as company vehicles.
Transitional Provisions:
To ease the transition, HMRC has outlined that businesses purchasing, leasing, or ordering a double cab pick-up before the respective April 2025 deadlines can continue to apply the current tax treatment until:
•The vehicle is disposed of.
•The lease expires.
•5 April 2029.
Whichever occurs first.
Action:
If you’re considering acquiring a double cab pick-up, doing so before April 2025 will allow you to benefit from the existing tax advantages during the transitional period. It’s advisable to assess the long-term implications of these changes on their tax position and consider alternative vehicle options if necessary.
Please contact us if you’d like to discuss your Vehicle tax planning then please contact us on 01386 366741 or email here and one of our advisers will be in contact.