As of April 6, 2025, double cab pickups (DCPUs) will be classified as cars for tax purposes, resulting in much higher benefit-in-kind (BiK) charges and delayed capital allowances compared to their current van status.
This change, announced in the autumn budget, affects vehicles with a payload of one tonne or more.
It will take effect on April 1 next year for companies and on April 6 for sole traders and partnerships.
The new budget has re-raised this issue following HMRC’s decision to class DCPUs as cars just eight months ago, a move that faced immediate backlash.
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The then Conservative government u-turned on their decision after claiming they had heard the calls of farmers and those in the motor trade about potential impacts.
Budget documentation states that buyers of DCPUs before April 2025 can keep the current capital allowances. In addition, employers who buy, lease, or order a DCPU before April 6, can employ the old BiK rules until they sell the vehicle, the lease ends, or April 5 2029, whichever comes first.
In her maiden speech the chancellor outlined that owners of electric vehicles would be expected to pay a different tax rate to that of other motorists and would retain the same BiK rate until 2028.
BiK is a fringe benefit that employees can receive at little or no cost, such as company cars.
"I will maintain the incentives for electric vehicles in company car tax from 2028 and increase the differential between fully electric and other vehicles in the first-year rates of Vehicle Excise Duty from April 2025,” stated Ms Reeves.
"These measures will raise around £400 million by the end of the forecast period."
Electric vehicles have been taxed at a much lower BiK rate compared to petrol and diesel cars or van since 2020, with buyers charged just two percent.
While the freeze's extension until 2028 has been welcomed by electric vehicle supporters, the close of a loophole that made certain company vehicles more affordable has drawn criticism.
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