If you’ve been keeping an eye on company car benefits, you know the rules can feel a bit like a minefield, especially when it comes to double cab pickups. These vehicles have been the subject of not one but two dramatic tax policy changes recently.
So, why is this the case? And, most importantly, what does it mean for you if you own, lease, or drive one for work? In this blog, we’ll be untangling the mess and helping you to figure out how you can make the most of the current rules.
Double cab pickups and tax
Double cab pickups, like the Toyota Hilux or Ford Ranger, are a popular choice for businesses. They’ve traditionally been classified as commercial vehicles, meaning they’re taxed under much lower Benefit-in-Kind (BIK) rates compared to cars. This classification has made them especially appealing for companies looking to offer employees a practical vehicle without saddling them with hefty tax bills.
For example, the BIK tax for a commercial vehicle is a flat rate — currently £720 per year for vans in 2023/24. Compare that to the thousands of pounds in BIK tax many car drivers pay, and it’s clear why double cab pickups have been so attractive. But then, everything changed… and then changed again.
The first U-turn: Pickups as cars (and then not)
In 2023, the previous government made waves by announcing that double cab pickups would be reclassified as cars for tax purposes starting in April 2025. This was a huge shift, as cars are taxed based on a percentage of their list price, with rates determined by their CO2 emissions.
For double cab pickup drivers, this meant a potentially massive increase in their tax bills. Suddenly, a vehicle that had been a tax-friendly workhorse was set to become an expensive luxury. Of course, this change caused lots of outrage and backlash. Within a week, the government reversed its decision stating that double cab pickups would remain commercial vehicles after all.
The new government’s decision: Back to cars
But in politics, nothing stays settled for long. When the new government took office, they revisited the decision and decided to reinstate the original plan.
Here’s the official position as it stands now:
- From April 2025, double cab pickups will be treated as cars for BIK tax purposes.
- However, if you acquire one before 31st March 2025, it will continue to be taxed as a commercial vehicle (van) until 5th April 2029.
This means we’re effectively in a transitional period. For those already driving or planning to lease a double cab pickup, the clock is ticking.
What does this mean for you?
Chances are if you clicked this blog, you’re being impacted by the double cab changes and want to know exactly what it means for you. Well, don’t panic, we’ve got you covered!
Lease or buy now, not later
If you’re considering a double cab pickup for your business or personal use, now is the time to act. Vehicles acquired before 31st March 2025 will benefit from the lower van BIK rates for nearly four additional years, even after the new rules kick in.
Leasing one now could save you thousands in taxes compared to waiting until after April 2025, when the higher car BIK rates will apply.
Budget for future costs
If you’re planning to lease or buy a double cab pickup after the April 2025 deadline, you’ll need to prepare for higher BIK tax bills. Cars are taxed based on a sliding scale of their CO2 emissions, so the more polluting the vehicle, the more expensive the tax. For businesses, this means double-checking your fleet’s running costs and considering whether alternative vehicles might make more financial sense in the long term.
Keep an eye on leasing contracts
If you already lease a double cab pickup or plan to sign a contract soon, review the terms very carefully. Leasing agreements that extend beyond 5th April 2029 may expose you to the higher car BIK rates once the transitional period ends.
Why the double U-turn?
Finally, you may be wondering why all the back and forth in the first place? The government’s reclassification appears to be driven by concerns about fairness and revenue. Double cab pickups, while used for work, often double as family vehicles, and some argue they blur the line between commercial and personal use.
Reclassifying them as cars aligns their taxation with vehicles that serve similar dual purposes. However, it also risks alienating businesses and drivers who rely on these vehicles for their practicality and affordability.
Have more questions that aren’t answered here or want to talk about another aspect of your finances? Contact our friendly team today.
