From 6 April 2025, HMRC is making important changes to the tax treatment of double cab pick-up trucks. These vehicles will be reclassified as cars for both Benefit-in-Kind (BIK) and capital allowance purposes – significantly increasing the tax burden for both businesses and employees.
Double Cab Pick-Ups Reclassified as Cars
Currently, many double cab pick-ups are treated as vans for tax purposes. This classification provides more favourable Benefit-in-Kind (BIK) rates and allows businesses to claim Annual Investment Allowance (AIA) in full.
However, under the new rules effective from 6 April 2025, HMRC will treat most double cab pick-ups as cars, not vans.
Impact on Benefit-in-Kind (BIK)
From the 2025/26 tax year, the fixed BIK rates for vans – £4,020 (plus £769 for fuel) – will no longer apply to double cab pick-ups. Instead, the BIK value will be calculated based on the list price of the vehicle and its CO2 emissions.
What This Means for Employees and Employers
- Employees will face higher tax bills based on the new car-based BIK calculations.
- Employers will see increased Class 1A National Insurance contributions due to the higher BIK values.
Impact on Capital Allowances
Businesses will also be affected when it comes to claiming tax relief on double cab pick-up purchases.
Key Capital Allowance Changes
From 6 April 2025, businesses can no longer claim the full Annual Investment Allowance (AIA) on these vehicles.
Instead, only Writing Down Allowances (WDA) will be available—typically:
- 18% for lower-emission vehicles
- 6% for higher-emission vehicles
Transitional Rules Until 2029
There will be a transitional period in place. If your business acquired or leased a double cab pick-up before 6 April 2025, you can continue to apply the current van treatment until the earlier of:
- The date the vehicle is sold or disposed of
- The lease agreement ends
- 5 April 2029
What Should You Do Now?
If your business uses double cab pick-up trucks or you’re planning to purchase one soon, it’s essential to:
- Review current vehicle contracts and purchase plans
- Understand your future BIK obligations
- Plan capital expenditure accordingly
Need Advice on Vehicle Tax Changes?
At SW&P Accountancy, we help businesses across the UK navigate complex tax changes. If you’re unsure how the new HMRC rules will affect your company vehicles, get in touch with our team today for expert, tailored advice.
