Important changes for double cab pick-ups
Gordon Thrower · Posted on: June 20th 2025 · read
With effect from April 2025 double cab pick-ups are treated as cars for capital allowances and benefit in kind (BIK) purposes.
Background
Over recent years there has been controversy over whether double cab pick-ups should be taxable as a company car or van – both of which have significantly different tax treatments.
A high profile court case between Coca Cola v HMRC in 2020 determined that the tax treatment of a vehicle would depend on its primary purpose. If the primary suitability was the transportation of passengers the vehicle would be treated as a car, alternatively if its primary purpose was to transport goods, then it would be treated as a van.
Transitional Arrangements
HMRC have confirmed that transitional arrangements will be in place for expenditure incurred as a result of a contract entered into before 6 April 2025 and the expenditure is incurred after this date. In these circumstances the previous treatment can be relied upon and until the earlier of disposal, lease expiry or 5 April 2029.
Impact on BIKs
Where private use is insignificant, double cab pick-ups currently do not give rise to a taxable BIK. However as a result of the new classification as a car, a BIK will arise if the vehicle is available for any level of private use. In addition, a fuel scale charge arises where fuel for private mileage is provided.
Therefore there will be increased tax liabilities due for employees and Class 1A liabilities for employers.
Corporation Tax
For expenditure incurred on or after 1 April 2025 for Corporation Tax and 6 April 2025 for Income Tax, businesses will need to treat double cab pick-ups as cars for capital allowance purposes. This means they will no longer be permitted to claim 100%-year one tax relief through First Year Allowances or the Annual Investment Allowance. They will instead need to claim more limited Writing Down Allowances at 18% per annum where Co2 levels are at or below 50g/km, and at 6% per annum where they exceed 50g/km.
New and unused electric double cab pick-ups may however still qualify for 100% first year tax relief.
Similarly, for leased double cab pick-ups, businesses will now generally face a 15% restriction on the tax deduction otherwise given against leasing costs where vehicle Co2 levels exceed 50g/km.
VAT Treatments
There is no change to the VAT treatment of double cab pick-ups. Vehicles with a payload of 1 tonne or more continue to be excluded from the definition of ‘cars’ for VAT purposes. This means that input VAT recovery is not subject to the block associated with cars, but businesses must still consider the extent of private use and make VAT adjustments to reflect that use.
For more information
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