The 2024 Autumn Budget included plans to reclassify double cab pick-up trucks as company cars for tax purposes. Originally proposed by the Conservative Party earlier this year (see our previous blogs here and here), but dropped shortly after, the measure has now been reintroduced in Labour’s first Budget since taking office.
Double cab pick-ups have always been placed in a somewhat ‘grey area’ when it comes to tax. Even though they’re often used as commercial vehicles, they’re dual purpose (serving both business and personal requirements), leading to mixed tax rules over the years. The latest changes aim to clarify how these vehicles are classified for tax purposes.
Key dates
From 1 April 2025 for corporation tax and 6 April 2025 for income tax, double cab pick-ups with a payload capacity of at least one tonne will be classified as “cars” for specific tax purposes. This reclassification will affect how DCPUs are handled in terms of capital allowances, benefits-in-kind (BiK), and some business profit deductions.
Tax implications for drivers and businesses
The Budget Red Book outlines that the tax change will likely bring:
- higher BiK charges as a result of the reclassification, potentially raising personal tax liabilities
- increased NICs for employers.
- reduced capital allowance benefits.
Transitional arrangements
For employers who have bought, leased, or ordered a double cab pick-up before 6 April 2025, previous tax treatments will continue to apply. This arrangement will last until the lease ends, the vehicle is sold or scrapped, or until 5 April 2029 – whichever comes first. This transitional period allows businesses to plan for the changes and explore possible alternative tax strategies.
Get in touch
If you’d like to discuss how these changes could impact you or your business, or need further clarification on HMRC’s latest guidance on double cab pick-ups, contact our tax manager, Julie Walsh, by clicking the button below.
