From 6th April 2025 under new tax guidance from HMRC, double cab pick-ups will be classified as company cars.
After years of debate around legislation and defining the tax treatment of when a vehicle or van acts a company car, the new rule means that double cab pick-ups purchased on or after 6th April won’t be classed as commercial vans but classed as cars.
To help you understand the implications of these changes and navigate the transition period, I’ve outlined everything you need to know.
Background behind the changes
You may remember back in March 2024, HMRC announced changes to the double cab pickups, which was swiftly reversed after just two weeks.
Following the budget in October 2024, HMRC are now re-instating those rules.
The debate surrounding the tax treatment of vehicles and vans has been ongoing for years, prompting the need for clear legislation to define the distinction. The implementation of this new rule will directly impact double cab pick-ups acquired on or after the specified date (6th April), leading to their classification as cars rather than commercial vans.
What classifies as a double cab pick-up
HMRC categorises a double cab pickup based on:
- its configuration of four doors
- approximate seating for four individuals
- an open pickup area at the rear of the passenger cab
Historically, the tax treatment of double cabs was aligned with VAT rates, which were determined by their payload. Specifically, if a double cab’s payload exceeded one tonne, it was classified as a commercial vehicle; otherwise, it was considered a private car.
The payload has served as a defining factor to establish the “primary suitability” of a pickup, indicating its intended use.
HMRC’s view is that typically, these vehicles are equally suited to convey passengers and goods and have no predominant suitability.
As a result, single cab pickups will still be accepted as commercial vehicles.
Navigating the changes
Under the revised guidelines, double cab pick-ups purchased on or after 6th April 2025 will no longer enjoy the tax advantages associated with being classified as commercial vans. Instead, they will be subject to the tax implications typically associated with cars, resulting in a less tax-efficient arrangement for businesses.
If you purchase, lease, or order a double cab pickup before 5th April 2025, the current tax rules will apply until the earlier of:
- You dispose of the vehicle
- The contract hire lease expires
- 5th April 2029
Consequently, businesses seeking to capitalise on the current tax benefits associated with double cab pick-ups are advised to complete their purchases before 5th April 2025 to ensure they fall under the existing tax-efficient framework.
Important note:
If the payload of your double cab pickup is more than 1 tonne, there is no change to the VAT treatment as it is still considered to be a goods vehicle for VAT purposes, and VAT can be reclaimed.
Your next move
For anyone considering purchasing or leasing a double cab vehicle, it’s imperative to act swiftly and secure your purchase before 5th April 2025. This is so that you can take advantage of the beneficial tax treatment that is currently aligned with commercial vans.
If you acquire a double cab vehicle after this date, then this can result in the vehicles being treated as cars, meaning they are subjected to the tax implications based on Benefits in Kind (BIK).
Here to help
As the landscape of company vehicle taxation undergoes a transformation, it’s essential for businesses and individuals alike to stay informed and proactively adapt to these changes to ensure optimal tax efficiency and compliance. If you are looking for advice on the new rules to double cab vehicles, we can help. To speak to one of our friendly advisers, fill out the form below.
