If you drive a double cab pickup as your company vehicle, such as a Ford Ranger or Nissan Navara, then your tax bill might be about to go up as from April 2025 these vehicles will no longer be automatically classed as vans.
If a company provides an employee with a vehicle that is available for private use, this is a benefit-in-kind. The employee has to pay tax based on the ‘cash equivalent value’ of the vehicle.
If the vehicle is a car, the cash equivalent value for 2025/26 can be up to 37% of the list price of the car, depending on the CO2 emissions.
If the vehicle is a goods vehicle or van, the cash equivalent value is fixed at £4,020.
Clearly, there could be a considerable tax-saving to be made if your vehicle can be classed as a van rather than a car.
What were the old rules?
When taxing benefits-in-kind (BIKs), HMRC used to accept that double cab pickups with a payload of 1,000kg or more were goods vehicles and not cars.
What are the new rules?
From 6 April 2025, double cab pickups will no longer be treated as goods vehicles and will instead be cars for BIK purposes.
In order to taxed as a van, the vehicle would now have to meet one of the exemptions from being a car, which are:
- It is a vehicle of a construction that is primarily suited for the conveyance of goods (such as a lorry or a van)
- It is a vehicle that is not suitable for use as a private vehicle (such as a bus)
It’s clear that there is nothing about double cab pickups that makes them unsuitable for private use, so this leaves us with the goods vehicle option.
A double cab pickup is obviously suitable for both private use and for goods. The legislation is worded so that if it is equally suitable for both, then it is a car. It must be primarily suitable for goods to be classified as a van.
HMRC have stressed that the construction of the vehicle is important, and modifications would have to be sufficiently permanent and substantial in scale to change that construction. For example, removing the second row of seats but leaving the mountings and seat belt fixtures in place does not change the construction of the vehicle. Nor would placing temporary covers over the rear side windows.
What are the transitional rules?
If you bought or leased a double cab pickup before 6 April 2025 then the previous treatment as a van will continue to apply until 5 April 2029 as long as the lease doesn’t expire, and it is not disposed of, traded in or replaced.
The vehicle retains the previous treatment if it is transferred between employees, but not if a new lease is entered into on the same vehicle.
From the tax year 2029/30 the vehicle will most likely be taxed as a car, with the BIK calculated based on its original list price and the CO2 emissions.
What should I do?
If you have a double cab pickup and are thinking of changing your vehicle, make sure that you speak to your accountant first as they will be able to advise you about the consequences.
Even if you don’t change your vehicle you will need to be aware of the tax cost of continuing to drive this type of vehicle past 5 April 2029.
Lower-emission vehicles would result in a lower BIK charge so it may be worth researching these to see if they would meet your requirements.
Electric and hybrid vehicles can have BIK rates of as little as 3% so may be worth considering as an alternative.
