Reversing the previous Government’s u-turn on the tax treatment of double cab pick-ups, they will revert to being treated as cars for certain taxation purposes from April 2025.
If you purchase a double cab pick-up with a payload of one tonne or more before 1 April 2025 for corporation tax, or 6 April 2025 for income tax, you can enjoy the favourable tax treatment available on vehicles primarily suited to the conveyance of goods. These include:
• 100% annual investment allowance;
• full expensing; and
• flat rate benefit in kind value.
Double cab pick-ups purchased after those dates will lose the beneficial treatment as they will be classified as cars.
Transitional arrangements for capital allowances will apply where a contract to purchase or lease a double cab pick-up is entered into on or before the date of the change, as long as expenditure has been incurred, ie money has changed hands, before 1 October 2025.
Employers that have purchased, leased or ordered a double cab pick-up before 6 April 2025 can benefit from the previous benefit in kind treatment until the earlier of: disposal of the vehicle; expiry of the lease; or 5 April 2029. Double cab pick-ups with a payload of less than one tonne will continue to be treated as cars for taxation purposes. As well as a reduction in capital allowances on these vehicles, the change is likely to trigger significant benefit in kind charges for drivers where there is private use, as well as Class 1A NIC for employers.
If you own, lease, or are considering acquiring vehicles of this nature, contact Graeme Fox on graeme.fox@hhllp.co.uk to discuss the implications of these changes for your business.
