Vehicles like the Isuzu D-Max are being reclassified (Image: Isuzu)
From April 2025, double-cab pick-ups will be reclassified as cars for tax purposes, potentially tripling tax costs for some drivers, warn experts. This change, announced in the 2024 Autumn Budget, means Benefit-in-Kind (BiK) tax will move from a flat rate of £3,960 to an emissions-based rate, with high-emission diesel models being the most affected.
, a car repair financing expert, cautions that businesses and tradespeople who depend on these vehicles may need to rethink their fleets. Many are expected to switch to vans or electric alternatives to cut costs.
With crucial deadlines approaching, Bumper’s experts recommend reviewing tax positions before the changes come into effect.
What are the UK pick-up truck tax changes?
Starting from April, double-cab pick-up trucks will be categorised as cars for tax purposes, as part of the 2024 autumn budget.
This will significantly affect the tax for these vehicles. BiK refers to goods and services provided to an employee at a reduced rate or free of charge.
Such vehicles are widely used by people for work (Image: PA)
At present, light commercial vehicles (for example, 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, from April 2025, they’ll be reclassified as cars and BiK tax will be calculated on a sliding scale based on emissions.
The shift to taxing the typically high-emission diesel engines of most double-cab pick-ups is anticipated to significantly hike drivers’ tax bills.
An example of the new commercial vehicle tax changes
To illustrate the new commercial vehicle tax changes, let’s consider an example. If you operate a company-owned vehicle that falls into the highest BiK bracket for company cars, your annual tax bill could skyrocket to as much as £15,000.
This figure is nearly triple the current flat rate for light commercial vehicles, posing a substantial financial burden for tradespeople who rely on these trucks for their livelihood.
What to do for existing double-cab pick-up trucks?
For those who already own a double-cab pick-up truck, has outlined transitional BiK tax arrangements for employers who have invested in these vehicles. Businesses that purchased, ordered, or leased a double cab pickup before April 2025 can continue using previous tax treatments.
However, it’s important to note that this transitional treatment will only be valid until:
- The vehicle is disposed of
- Lease expiration
- April 5, 2029 (if the above don’t occur first)
Therefore, if you currently own one of these pick-ups, there is some leeway before and after the new tax rules come into effect.
Effects of the new pick-up truck tax changes
Beyond the immediate impact of increased taxes, what implications do these changes hold for the industry?
The new regulations may prompt businesses in sectors such as construction and farming to reconsider their pick-up vehicle fleets.
Despite their dependability, double-cab pick-ups are set to be hit with higher Benefit-in-Kind (BiK) taxes, resulting in a financial pinch for employers due to increased National Insurance contributions. This could prompt many businesses to pivot towards conventional vans to alleviate the tax strain, as these vehicles continue to enjoy lower BiK rates.
A shift towards electric vehicles (EVs) may also be on the cards, given their lower emissions and consequent tax benefits.
Key dates for double-cab pick-up tax changes.
Keep these crucial commercial vehicle tax change dates in mind:
- 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.