Changes to Commercial Classification for Double Cab Pick-ups from April 2025

The Autumn Budget introduced significant changes to the tax treatment of double cab pick-ups that will impact business and drivers. From April 25, double cab pick-ups with a payload capacity of one tonne or more will be reclassified as passenger cars for tax purposes. This change means these vehicles will not benefit from the tax advantages associated with vans.

This reclassification will affect capital allowances, Benefit-in-Kind (BIK) taxation, and business profit deductions.

Popular Double Cab Models at Busseys & Bussey Vehicle Leasing

• Ford Ranger – market leading pick-up, Ranger remains a popular choice for all applications
• Volkswagen Amarok – The Amarok’s performance and looks are always appealing
• Isuzu D-Max –Reliability first, the D-Max is designed for the toughest of business needs.

These models meet the one-tonne payload threshold currently, but all will be subject to the new tax classification in 2025.

Key Changes and Effective Dates

From April 2025:

• 1 April 2025: For Corporation Tax purposes, double cab pick-ups will be treated as passenger cars.
• 6 April 2025: For Income Tax, double cab pick-ups will follow the passenger car classification for BIK and profit deductions.

The current flat BIK rate for double cab pick-ups (approximately £3,960 annually) will no longer apply. Instead, the BIK will be calculated based on passenger car rules, which could result in much higher tax liabilities.

Impact on Capital Allowances and Business Deductions

• Businesses can only claim capital allowances on double cab pick-ups if purchased before April 2025.
• From April 2025, newly purchased double cab pick-ups will follow the passenger car capital allowance rules, reducing the tax benefits previously available under the commercial vehicle classification.

Transitional Arrangements for Existing Vehicles

HMRC has introduced transitional BIK arrangements for vehicles purchased, leased, or ordered before April 2025. These vehicles can continue using the current tax treatment until the earliest of the following:

• The vehicle is sold or disposed of.
• The lease expires.
• 5 April 2029.

Future Options

• Ordering prior to April 2025 for longest transition.
• ‘Single Cab’ Vehicles – Ford XLT, INEOS Grenadier 2-Seat, Defender Hardtop
• Electric or Hybrid Vehicles (Cars, Vans, (future launch Pick-ups – Ford Lightning))

Planning ahead for these changes will help ensure that your vehicle investments align with your financial and operational needs. At Busseys, we’re here to guide you through these changes. Contact us today or visit one of our dealerships to speak with our team about how this may affect your choices. We’re ready to help you find the best vehicles options for your needs.