Changes to the tax treatment of pick-up trucks from April 2025

What you need to know

Significant changes are coming to the tax treatment of double cab pick-up trucks in the UK. These changes will impact both businesses and employees who use these vehicles.

From April 2025, double cab pick-up trucks with a payload capacity of at least one tonne will no longer be classified as vans for tax purposes. Instead, they will be treated as cars.

Impact on benefit-in-kind tax

The reclassification means that employees using double cab pick-ups for personal use will face higher benefit-in-kind (BIK) tax rates. Previously, these vehicles enjoyed lower BIK tax rates as they were classified as vans. The new classification as cars will result in higher tax liabilities for employees.

Capital allowances

Businesses will also be affected by the changes in capital allowances. Double cab pick-ups will no longer qualify for the same capital allowances as vans. Instead, they will be subject to the allowances applicable to cars, which are generally less favourable.

Transitional arrangements

To ease the transition, HMRC has introduced transitional arrangements for vehicles purchased, leased, or ordered before April 6, 2025. These vehicles can continue to be treated under the old rules until the earlier of disposal, lease expiry, or April 5, 2029.

Practical implications for businesses

Businesses should review their fleet and consider the financial implications of these changes. If your current double cab pick-up is nearing the end of its life, it might be beneficial to replace it before the new rules take effect to lock in the current tax benefits until 2029.

Conclusion

The upcoming changes by HMRC represent a significant shift in how double cab pick-up trucks are taxed. Both businesses and employees need to be aware of these changes and plan accordingly to mitigate any potential financial impact.

Need help?

If you have any specific questions or need further clarification on these changes, please contact your usual Larking Gowen advisor on 0330 024 0888 or email enquiry@larking-gowen.co.uk. You can also find contact details on the Our People section of the website.

Laura Whitmore