A Significant Change For Double Cab Pick Ups

9th November 2024

Double Cab Pick Up Trucks Are To Be Treated As Cars

The 2024 Autumn Budget has introduced a significant change for Double Cab Pick Up trucks (DCPUs).

Starting from April 2025, DCPUs with a payload of one tonne or more will be treated as company cars for tax purposes. This change will impact both Corporation Tax and Income Tax in terms of the timing of capital allowances, affecting the benefit-in-kind (BIK) tax paid by employees and again employers’ business profits.

Key Points:

Tax Treatment:

DCPUs will be subject to capital allowances but in line with cars rather than plant and equipment, BIK will be in line with cars rather than commercial vehicles/vans.

Transitional Arrangements:

Employers who have purchased, leased, or ordered a DCPU before April 6, 2025, can continue using the previous tax treatment until the earlier of disposal, lease expiry, or 5 April, 2029.

Financial Impact:

The change is expected to increase BIK charges for employees and Class 1A NICs for businesses. Capital Allowances for DCPUs will be slower to obtain going forward. Cars are generally more expensive from an Income Tax and National Insurance perspective compared to vans.

VAT Impact:

Currently the VAT on DCPUs will continue to be recoverable as they continue to be classed as commercial vehicles for VAT purposes.

From the Government’s point of view, this change aims to close loopholes and ensure fairer taxation, but it will likely lead to higher costs for businesses and employees who use these types of vehicles.

It’s a significant shift in policy that will require careful planning and adjustments from businesses.