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The Budget had news for pick up drivers. There will be changes in the next two tax years mean double cab pick-up trucks with a payload of one tonne or more will be treated as company cars for tax purposes, increasing the employee's benefit-in-kind figure and also a significant jump in company car tax as these vehicles have very high CO2. This will also hit employer’s class 1a payments as well for providing an employee a company car.
From April 2025, for corporation tax, and from April 6, 2025 for income tax, it says that double cab pick-ups will be treated as cars for the purposes of capital allowances, BIK and further deductions from business taxable profits.
From 6 April 2025, HMRC will no longer align its interpretation of the terms “car” and “van” for tax purposes with the definitions used for VAT purposes. Under the VAT approach double cab pickups are classified based on payload capacity, with anything under one tonne classified as a car, and anything a tonne and over as a van. This is because typically these vehicles are equally suited to convey passengers and goods and have no predominant suitability.
Crucially, existing BIK arrangements will apply for double cab pick-ups bought, leased or ordered before 6th April 2025, with this treatment in place until disposal, lease expiry or 5th April 2029, whichever is the soonest. The Government states "Transitional arrangements - Transitional arrangements will apply for employers that have purchased, leased, or ordered a double cab pickup before 6 April 2025, whereby they will be able to rely upon the previous treatment until the earlier of disposal, lease expiry, or 5 April 2029."
So get your pick up's ordered asap as lead times are now well out with the rush of people ordering their replacements now.
Update 7/3/25
HMRC Clarifies BIK Tax Rules for Double Cab Pick-Ups
Employers who have purchased, leased, or placed an order for a double cab pick-up before April 6, 2025, will benefit from transitional benefit-in-kind (BIK) tax arrangements, regardless of when the vehicle is delivered.
Initially, HMRC’s tax guidance raised concerns that reassigning a pick-up truck to a different employee after April 6 could alter its tax treatment, even if the vehicle had been ordered before the cut-off date. However, HMRC has now clarified its stance—employers can reallocate these vehicles without losing their transitional tax status.
A spokesperson from HMRC confirmed to Fleet News:
“If an employer transfers a double cab pick-up to another employee between April 6, 2025, and April 5, 2029, they may continue treating it as a van for tax purposes, provided there is no disposal, and the lease has not ended.”
This update provides much-needed certainty for businesses, ensuring that tax benefits remain in place even if a vehicle is reassigned within the company.