News & Events
Tax changes for double cab pick-ups: What you need to do to prepare
7th March 2025
From April 2025, changes to the way double cab pick-up trucks are taxed will come into effect. With end-of-year tax planning underway, it’s essential to understand how these changes could affect your tax liabilities and business investment decisions for the year ahead. The Rowleys tax team share more about the changes and some of the key considerations you might wish to consider in your end-of-year-tax planning.
What’s changing?
Currently, double cab pick-ups are typically treated as commercial vehicles for tax purposes, following the same rules as vans. This means they attract lower benefit-in-kind charges and more favorable capital allowances. However, from 1 April 2025 for Corporation Tax and 6 April 2025 for Income Tax, the tax treatment of most double cab pick-ups will no longer follow VAT rules, meaning they will be taxed as company cars rather than vans.
What is a double cab pick-up?
A double cab is a type of pickup truck that has four doors and two rows of seats, providing space for both passengers and cargo. It typically seats up to five people, making it more practical for carrying passengers compared to a single cab (which has just one row of seats).
Double cab pickups have become popular as business vehicles because they offer both utility and comfort, especially for businesses that need to transport both equipment and people.
How do tax changes to double cab pick-ups impact you?
Under the new rules, most double cab pick-ups will no longer be classed as commercial vehicles unless they can be shown to be predominantly suited for the movement of goods – a test that many of these vehicles will not meet. Instead, they will be taxed as company cars, significantly increasing the tax burden for both businesses and employees.
Key impacts:
- Benefit in Kind charges – employees using double cab pick-ups for personal use will be taxed based on the list price of the vehicle and CO2 emissions, rather than the flat-rate van benefit charge.
- Private fuel charges – where employers pay for private fuel, the car fuel scale charge will apply, further increasing tax costs.
- Capital Allowances changes – businesses will only be able to claim writing down allowances on the cost of double cab pick-ups – typically at 6% due to their higher CO2 emissions – rather than the 100% Annual Investment Allowance available for vans. Writing down allowances allow businesses to claim tax relief on a percentage of the asset’s value each year, spreading the cost over several years to reflect its depreciation, rather than claiming the full cost upfront.
- Leasing costs – tax relief on leasing costs will be restricted to 85% where the vehicle’s CO2 emissions exceed 50g/km.
Transitional rules
If you already own or lease a double cab pick-up, transitional rules will apply:
- Vehicles purchased, ordered, or leased before 1 April 2025 for Corporation Tax (or 6 April 2025 for Income Tax) will continue to be taxed under the current van benefit rules, provided the expenditure is incurred before 1 October 2025.
- These vehicles will retain the current tax treatment until the disposal of the vehicle, expiry of the lease, or 5 April 2029, whichever comes first.
What should you do now?
With these changes on the horizon, it’s worth factoring them into their end-of-year tax planning. Considerations might include:
- Bringing forward purchases of double cab pick-ups to benefit from the existing tax treatment.
- Reviewing the level of private use of vehicles to understand the potential benefit in kind costs.
- Exploring alternative vehicle options that may offer more tax-efficient solutions.
Get in touch
If you’re unsure how the tax changes for double cab pick-ups could impact your business or employees, our friendly tax team is here to help. Get in touch to discuss your tax planning strategy and make the most of the transitional rules before the deadline.