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Tax shift for double-cab pick-ups: What you need to know

The Autumn Budget included new tax rules for double-cab pick-up trucks from April 2025. Here, the Hendy team break down the key changes, their implications and how to plan ahead to navigate this shift.

The Autumn Budget included new tax rules for double-cab pick-up trucks from April 2025. Here, the Hendy team break down the key changes, their implications and how to plan ahead to navigate this shift.

From April 2025, double cab pick-up trucks will no longer be classified as commercial vehicles for corporation and income tax purposes. 

This change from a previous favourable tax treatment will significantly increase the benefit-in-kind (BIK) tax liability for employees and reduce tax deduction options for businesses. It will also impact drivers of pick-ups, including the Ford Ranger double cab – but there are transitional arrangements to take advantage of!

The key changes

- From 1 April 2025 – for Corporation Tax: double cab pick-ups will be treated as passenger cars.

- From 6 April 2025 – for Income Tax: double cab pick-ups will follow the same classification for BIK and profit deductions.

Historically, pick-up trucks have been an attractive option for employers and employees due to their lower BIK charges, similar to vans. The upcoming changes will eliminate this tax advantage, with BIK now based on the vehicle’s list price and CO2 emissions, bringing them in line with passenger cars. 

Planning ahead

Here at Hendy, the Ford Ranger double-cab is a popular option for companies with pick-up fleets due to its robust performance. With its one-tonne payload requirement, it will now fall under the new tax classification. But it’s not all bad news.

To ease the changeover, the government have announced transitional BIK arrangements. If you buy a new Ford Ranger double cab before April 2025, the current capital allowances treatment will remain applicable until April 2029. However, this will only be valid until the vehicle is disposed of, the lease expires or 5 April 2029 (whichever occurs first).

Businesses should also plan purchases carefully to ensure that the tax point for capital allowances is before April 2025. Typically, this is determined by the delivery date or, for financed purchases, the date the asset is first used.

We’re here to help

To summarise, losing favourable tax treatments will have wide-ranging implications, but the transitional rules give some time to adjust. Whether you’re a business owner managing a fleet or an employee enjoying the tax advantages of pick-ups, talk to the Hendy team today to plan ahead for April 2025. 

It’s also worth noting that double cab pick-ups with a payload exceeding one tonne may still qualify as commercial vehicles for VAT purposes.

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