The Government has announced a major change to the taxation for double-cab pickup trucks that will see them classed as cars.

The double-cab pickup market is about to take a hit at the hands of HM Revenue and Customs (HMRC), as dual-purpose vehicles will be considered cars for company benefit taxation starting July 1, 2024.

Previously, these vehicles were categorised as either cars or vans based on their payload — any double-cab that could carry more than a tonne was considered a commercial vehicle, and benefit in kind taxation was then set against a fixed rate of £3960.

A 20% taxpayer with a double-cab pickup as a company vehicle will now face a monthly tax bill of £66, while those paying at the 40% rate would be spending £132 a month.

From July, double-cab pickups will be considered cars, as they don’t have a primarily commercial function.

The changes will be significant. A driver using a Ford Ranger Wildtrak 2.0 as a company vehicle will, if taking delivery after July 1, 2024, face a company car tax bill of around £290 a month, rising to around £580 a month for a higher rate taxpayer — an increase of 340% over the existing figures.

Pickups will become significantly more expensive for company car tax because it will now be calculated based on their typically-high CO2 emissions. A Ford Ranger – the UK’s most popular pickup, and the fourth best-selling van in the UK last year – has CO2 emissions of more than 200g/km, putting it in the highest benefit in kind tax bracket of 37%.

The change in definition arises following a legal case between Coca-Cola and HMRC, which concluded that a vehicle should be clearly suited to one task or another and that no decision should be based on a narrow margin. In cases where it’s not clear if a vehicle is primarily suited for carrying goods or people, it should be classified as a car.

For employers who bought, leased, or ordered a double-cab pickup before July 1, 2024, HMRC has confirmed that transitional rules will see the current classification remain in place until the vehicle is sold, the lease ends, or until April 5, 2028, at the latest.

Single-cab pickups are unaffected by these changes.