February 2025
In the Autumn Budget 2024, released on 30th October 2024, HMRC introduced a change in the legislature regarding the tax treatment of double cab pick-ups. Vehicles purchased from April 2025 will be classified as company cars for benefit in kind, capital allowances, and some deductions from business profits and subject to increased tax rates.
Don’t miss out on the opportunity to secure your Isuzu D-Max at current rates before the changes take effect. With the new tax regulations set to impact double cab pick-ups from April 2025, there’s never been a better time to experience the unmatched capability, durability, and safety of the Isuzu D-Max. Book your test drive today and place your order now to lock in your purchase ahead of the price hike—act fast to avoid the increased costs! At David Taylor Garages we have over 50 pickups; New, Pre-registered and approved used, in stock and ready to drive away.
Take a look at this short video where Gene (DTG) and Graham (Isuzu UK) try to clear up some of the main points around the new tax changes; What will Benefit In Kind tax changes mean to me and my pickup truck?
Below are some key points taken from Isuzu UK's blog: Pick-Up Truck BIK Explained - Isuzu
HMRC has updated its legislation regarding the classification of double cab pick-ups, with regards to BIK, to be considered as cars as opposed to commercial vehicles from 6th April 2025.
Double cab pick-ups will be moving away from the previously set flat rate of £3,960 and instead will be subjected to the car BIK rate, which can vary between 2% and 37% based on the vehicle’s CO2. From 6th April 2025, electric double cab pick-ups with over 1-tonne payload will be subject to company car BIK rates (3%), increasing by 1% annually until 2028.
Capital allowances allow businesses to deduct some or all the value of the items (such as vehicles) from the profits before tax. From 1st April 2025, double cab pick-ups will also be classified as company cars with regard to CA.
Double cab pick-ups will be moving away from the previous classification as ‘plant and machinery’ for CA purposes and instead will be subjected to the company car rates, which can vary between 6%, 18% and 100%, based on the vehicle’s CO2
If you are a current owner or looking to purchase, lease, or order a double cab pick-up before 6th April 2025, HMRC has instated a transitional period before the cut-off date, whereby you will have the existing treatment until the earlier of disposal, lease expiry, or 5th April 2029.
This mitigation will ensure that all double cab pick-ups already owned or purchased before 6th April 2025 will not be subject to the BIK changes and will be classified as commercial vehicles.
Each case will be judged on an individual basis on whether the vehicle will be treated as purchased, leased, or ordered before 6th April 2025. You can demonstrate this by providing a contract, deposit documentation, written statement or email from the dealership/supplier confirming that an order has been placed.
It has been concluded, from the Court of Appeal in Payne & Ors, that double cab pick-ups are equally suited to convey both passengers and goods, therefore not demonstrating a predominant suitability.
As a result, dual-purpose double cab pick-ups will be considered as company cars for purposes of capital allowances, benefits in kind, and some deductions from business profits.
Extended cab pick-ups are affected however single cabs will be unaffected by the changes as HMRC ruled that they demonstrate clear suitability for commercial use.
For end customers, utilising double cab pick-ups as company cars, the new legislature will incur the new tax treatment for vehicles purchased, leased, or ordered from 6th April 2025.
VAT treatment of double cab pick-ups remains unaffected. All double cab pick-ups with payloads over 1 tonne qualify for VAT reclaims if the business which purchases the vehicle is VAT registered. The changes only impact capital allowances, benefits in kind, and some deductions from business profits.
Isuzu UK’s commitment to supporting its customers is of utmost importance and Isuzu will continue to monitor developments closely and collaborate with industry stakeholders to help you navigate these changes effectively. Please stay informed of the upcoming changes by visiting the HMRC page regarding the legislative changes www.gov.uk/government/publications/autumn-budget-2024.
(Information for guidance purposes only and subject to change)
Information taken from: Pick-Up Truck BIK Explained - Isuzu
