From April 2025, double-cab pick-ups will be reclassified as cars for tax purposes, leading to potentially tripled tax costs for some drivers, according to experts. The change, introduced in the 2024 Autumn Budget, means Benefit-in-Kind (BiK) tax will shift from a flat £3,960 to an emissions-based rate, hitting high-emission diesel models hardest.
Bumper, a car repair financing expert, warns that businesses and tradespeople relying on these vehicles may need to reconsider their fleets, with many expected to switch to vans or electric alternatives to reduce costs. With key deadlines looming, its experts have advised reviewing tax positions before the changes take effect.
What are the UK pick-up truck tax changes?
From April, double-cab pick-up trucks will be classified as cars for tax purposes. The new tax comes as part of the 2024 autumn budget.
This will significantly impact the benefit-in-kind (BiK) tax for these vehicles. BiK are goods and services provided to an employee at a reduced rate or for free.
Currently, light commercial vehicles (eg double cab pick-ups with a carrying capacity of one tonne or more) are subject to a flat BiK tax rate of £3,960 annually for company drivers. However, starting in April 2025, they’ll be reclassified as cars and BiK tax will instead be calculated on a sliding scale based on emissions.
Given the typically high-emission diesel engines of most double-cab pick-ups, this change is expected to substantially increase drivers’ tax bills.
An example of the new commercial vehicle tax changes
The new pick-up truck tax changes will depend on what kind of vehicle you own. Let’s look at an example.
If you drive a company-owned vehicle that falls into the highest BiK bracket for company cars, you may end up paying as much as £15,000 per year. This is almost three times the current flat rate for light commercial vehicles. It’s a significant hit for tradespeople who depend on these trucks for their work.
What to do for existing double-cab pick-up trucks?
Do you already own a double-cab pick-up truck? HMRC has announced transitional BiK tax arrangements for employers who have bought and invested in these vehicles.
Any business that purchased, ordered, or leased a double cab pickup before April 2025 can continue using previous tax treatments. However, note that this transactional treatment will only be valid until:
- The vehicle is disposed of
- Lease expiration
- April 5, 2029 (if the above don’t occur first)
So, if you currently have one of these pick-ups, you have some flexibility before and after the new tax rules are implemented.
Effects of the new pick-up truck tax changes
Aside from higher taxes, what do these changes mean for the industry? The new regulations may lead businesses in industries like construction and farming to rethink their pick-up vehicle fleets.
While reliable, double-cab pick-ups will face higher BiK taxes, which will lead to increased costs for employers due to added National Insurance contributions. Many businesses might switch to traditional vans to reduce the tax burden, which still benefits from lower BiK rates. We might also see a switch to electric vehicles (EVs), which offer reduced taxes thanks to their lower emissions.
Double-cab pick-up tax key dates
Make a note of these vital commercial vehicle tax change dates:
- April 1, 2025 — Double-cab pick-ups will be classified as passenger cars for Corporation Tax purposes.
- April 6, 2025 — For Income Tax, double-cab pick-ups will be classified as cars for BiK and profit deductions.