Upcoming Tax Changes for Double Cab Pickups: What You Need to Know

In the Autumn Budget of 2024, it was announced that from April 2025, double cab pickups (DCPUs) with a payload of one tonne or more will be classified as cars for certain tax purposes.

This marks a reversal from previous government plans to change the tax treatment of these vehicles.

Starting on April 1, 2025, for corporation tax, and April 6, 2025, for income tax, DCPUs will be considered as cars for capital allowance, Benefits in Kind (BiK), and some business profit deductions. Purchases of DCPUs made before April 2025 will continue under the existing capital allowance classification.

Employers who have purchased, leased, or ordered a DCPU before April 6, 2025, will be subject to "transitional" BiK rules. They can maintain the former tax treatment until either the vehicle is sold, the lease ends, or until April 5, 2029.

These modifications are expected to lead to increased BiK charges for drivers, additional Class 1A National Insurance Contributions for businesses, and less favorable capital allowances for relevant vehicles.

This decision aligns with a 2020 Court of Appeal ruling that most multi-purpose vehicles, including double cab pickups, should be categorized as cars, as seen in the case of Payne & Ors (Coca-Cola) v R & C Commrs.

The Conservative government had previously issued updated tax guidance on February 12, 2024, stating that double cabs with a payload of at least one tonne would be treated as cars rather than goods vehicles for both capital allowance and BiK purposes starting July 1, 2024. This move aimed to close a loophole that allowed some double cab pickup drivers to pay lower taxes than those with traditional company cars. However, it faced backlash from the farming and motoring sectors, leading the former administration to abandon these changes shortly after their announcement.

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