Double Cab Pickups

When is a van not a van?

When HMRC decide it’s a car.  From 6 April 2025, the tax treatment of double cab pick-ups will undergo significant changes. These changes are set to impact both employers and employees who use these vehicles, as well as the self-employed who utilise these vehicles within their business. 

Historically, double cab pick-ups have enjoyed favourable tax treatment, often being classified as vans and therefore qualifying for lower benefit-in-kind (BIK) rates and the ability to claim Annual Investment Allowance (AIA).   However, from 6 April 2025, new classification rules apply and most of these vehicles will be taxed as a car.

Changing Tax Implications

Benefit-in-Kind (BIK):  The rules surrounding private use for cars are much stricter than for vans.  For a vehicle classified as a car, simply taking the vehicle home rather than keeping it on work premises could trigger a benefit.  The BIK rates for cars are typically higher than those for vans, being based on the vehicle’s list price and CO₂ emissions, with rates reaching 37% of the list price for high-emission models.  This change will result in higher tax liabilities for both employees who use these vehicles, and their employers.

Capital Allowances: Double cab pick-ups will no longer qualify for AIA or full-expensing. Instead, they will be subject to car capital allowance rates, qualifying for an 18% annual writing down allowance, or 6% for higher emission vehicles. 

VAT Treatment: For the time being, the VAT rules remain unchanged. A double-cab pickup that previously qualified for VAT recovery will continue to do so.

To ease the transition, the government has introduced transitional rules. Employers who have purchased, leased, or ordered a double cab pick-up before 6 April 2025 can continue to apply the previous tax treatment until the earlier of the vehicle’s disposal, lease expiry, or 5 April 2029. This means that vehicles acquired before the deadline will retain their van classification for up to four more years, providing some relief to businesses and employees as they adjust to the new rules.

The upcoming changes to the tax treatment of double cab pick-ups represent a significant shift in how these vehicles are classified and taxed. Employers and employees should review their current vehicle fleets and consider the potential financial implications of these changes. By understanding the new rules and in particular the transitional arrangements, businesses can better prepare for the impact of these tax reforms.

This information is given by way of general guidance only, and no action should be taken based solely on the information contained herein. No liability is accepted by the firm for any actions taken without seeking appropriate professional advice.