Changes to tax rules for double cab pickups take effect – what you need to know

In the last year, there’s been significant uncertainty over the tax treatment of double cab pickups following several announcements which were later reversed. The original announcement by the Conservative government in Spring 2024 for double cab pickups to be treated as cars instead of vans from July 2024 was abandoned only a week later.  

After the U-turn, it was all change again when the new Labour government then confirmed in the Autumn Budget that double cab pickups will indeed be treated as cars where they are bought from 6 April 2025. 

What are the tax rules for double cab pickups going forward? 

Historically, the benefit and kind and capital allowances position followed the VAT treatment whereby double cab pickups aren’t treated as cars if they have a payload of one tonne or more. Despite the changes below, the VAT treatment isn’t changing. 

Benefit in kind changes 

From 6 April 2025, instead of being treated as vans, double cab pickups with a payload of one tonne or more will now be treated as cars for benefit in kind purposes. This has a significant impact on the taxable benefit in kind arising, compared to their previous treatment as vans. For the 2025/26 tax year, van benefit and van fuel benefit are charged at a fixed £4,020 and £769 respectively compared with car benefit and fuel benefit, which are based on the car’s list price when new multiplied by a percentage based on the car’s C02 emissions. The definition of private use for a car is much wider than a van as it includes home to work travel. 

Capital Allowance changes 

For Capital Allowances purposes, expenditure on a double cab pickup incurred on or after 1 April 2025 (Corporation Tax) and 6 April 2025 (Income Tax) will change and the guidance at HMRC manual CA23510 has been updated accordingly. This means that the principles in Section 268A CAA 2001 will apply so tax practitioners will need to consider whether the vehicle purchased is “a vehicle of a construction primarily suited for the conveyance of goods or burden of any description”. Most double cab pickups will therefore be treated as cars as they are designed to transport both people and goods, a point further explained in HMRC manual CA23511. 

Restriction of lease hiring costs  

In line with the benefit in kind and Capital Allowances changes, the lease of a double-cab pickup will be treated as a car for the purposes of the restriction of hiring costs for cars with CO2 emissions above 50 g/km. 

What are the transitional rules 

In all three cases above, transitional rules will apply. 

Benefit in kind transitional rules 

For employment tax purposes, transitional arrangements will apply where employers have purchased, leased, or ordered a double cab pickup before 6 April 2025. In those cases, the previous rules will apply up to the earlier of the disposal of the vehicle, lease expiry, or 5 April 2029.  

Where a double cab pickup subject to the transitional arrangements is transferred between employees between 6 April 2025 and 5 April it can continue to be treated as a van for tax purposes, provided there is no disposal, or the lease hasn’t expired.  

Capital allowances transitional rules 

For capital allowances purposes, a contract entered into before 1 April 2025 (Corporation Tax) or 6 April 2025 (Income Tax) will follow the previous rules provided the expenditure is incurred before 1 October 2025. A double cab pickup in those circumstances with a payload of one tonne or more won’t be treated as a car. 

Lease car transitional rules 

Where the hire contract of a double cab pickup is entered into before 1 April 2025 (Corporation Tax) or 6 April 2025 (Income Tax), the previous rules will apply for expenditure incurred before 1 October 2025 and it won’t be treated as expenditure on hiring a car for the purposes of the restriction on lease hiring costs.  

This treatment will stop applying for expenditure on or after 1 October 2025, which will be treated as expenditure on hiring a car, regardless of when the hire contract was entered into. 

Let us know your views 

We welcome your views, which help inform our work on consultations or other tax-related matters. We respondedto many tax calls for evidence and consultations, as well as producing tax policy papers and reports. We also regularly attend meetings with HMRC at which service levels, delays and other issues are discussed, and we raise problems being encountered by members. 

Please get in touch to share your insights and feedback.