New Tax Rules for Double Cab Pick-Ups in 2025

With all of the revelations from the Autumn Budget, one major detail that slipped under the radar was that from 6th April 2025, double cab pick-up trucks will be treated as cars for the purposes of capital allowances, benefits in kind (BIK), and some deductions from business profits.

These changes will apply to vehicles purchased or leased on or after 6 April 2025 and are going to have a huge impact on agriculture and construction businesses that have been used to these vehicles being a tax efficient and practical option for their business.

From 6th April 2025, double cab pickups will generally be treated as cars for capital allowance and employment benefit purposes. This will reduce capital allowances (AIA relief claimed by companies) and increase benefits in kind (Tax suffered by individuals). As with all cars, this means they will be subject to benefit-in-kind (BIK) tax, which is calculated based on the vehicle’s CO2 emissions and list price.

Here are some key points:

  • The BIK tax rates will be higher, with rates ranging from 3% for zero-emission vehicles to 37% for vehicles emitting 160g/km or more. The majority of double cab pickups are run on diesel and will be at the upper end of this range.
  • The existing capital allowances treatment will apply to those who purchase double cab pick-ups before April 2025, until the earlier of disposal, lease expiry, or 5 April 2029. Therefore, if you’re thinking of buying one make sure you do it before April 2025.
  • Diesel models not complying with Real Driving Emissions Step 2 standards will face an additional 4% surcharge.

Transitional Arrangements:

If you purchase, lease, or order a double cab pick-up before 5th April 2025, the current tax rules will continue to apply until one of the below is triggered (Whichever comes first):

  1. You dispose of the vehicle,
  2. The lease expires, or
  3. The lease overruns 5th April 2029

This transitional period provides some breathing room for businesses and employees who act quickly. However, vehicles financed on long-term leases may still face the new rules if the lease extends beyond 5th April 2029.

These changes are expected to increase the tax burden on both drivers and employers, so it’s important to stay informed and consider the potential financial impact. Timing maybe everything, so if you’re considering buying or leasing a double cab pickup for your business, make sure you do so before 5 April 2025.

For any additional support or information, please feel free to contact office@griffinaccountancy.co.uk