Tax shake-up for double cab pickups on the horizon

For years, businesses have enjoyed lower tax bills on double cab pickups, thanks to their classification as vans.  

However, from 6 April 2025, the tax rules are changing, and most will be treated as cars instead.  

That means higher costs for employers and employees alike.  

What does this mean for you, and how long can you still benefit from the current tax treatment? 

Current tax treatment of double cab pickups 

Right now, a double cab pickup with a payload of at least one tonne is considered a van for tax purposes, which means: 

• A fixed BIK rate for personal use (£3,960 for 2024-25). 

• A fixed fuel benefit charge if fuel is provided (£757 for 2024-25). 

• Overall, a cheaper tax burden than company cars. 

This classification is based on VAT rules, which focus on payload capacity. However, HM Revenue & Customs (HMRC) is moving away from this approach. 

The new rules from April 2025 

From 6 April 2025, HMRC will no longer use VAT definitions to classify double cab pickups for tax purposes. Instead, a primary suitability test will be applied: 

• If a vehicle is designed for both passengers and cargo, it will be taxed as a car. 

• Since most double cab pickups meet this definition, they will face higher tax rates. 

Why does this matter? 

• Company cars are taxed based on list price and CO2 emissions rather than a fixed amount, often leading to a bigger tax bill for employees. 

• Employers will see higher National Insurance contributions (NICs) on these vehicles. 

Can businesses still benefit from van tax rules for double cab pickups? 

Yes, but only for a limited time under transitional arrangements. If you own or lease a double cab pickup before 6 April 2025, you can still apply van tax rules until the earliest of: 

• The vehicle being sold. 

• The end of the lease. 

• 5 April 2029. 

What does this mean in practice? 

• Bought a new pickup after April 2025? It is taxed as a car immediately. 

• Leased one before April 2025? The lower van tax rates apply, but only until the lease ends or April 2029. 

• Ordered before the deadline but delivered after? If the purchase was agreed before April 2025, van tax rules apply until the vehicle is sold or April 2029. 

What should businesses do now? 

• Review vehicle plans – If your business relies on double cab pickups, consider buying or leasing before April 2025 to keep the current tax benefits. 

• Prepare for increased costs – Employees using pickups for personal journeys could face significantly higher tax bills. 

• Seek professional advice – The new rules introduce complexities that could impact your business. Getting expert guidance from our team now can help you plan ahead. 

The days of double cab pickups enjoying van tax rates are numbered. Businesses that plan ahead can still make the most of the current rules – while they last. 

For more information on the tax classification changes to double cab pickups and for professional advice, please speak to us today.