24 Jun 2025
If your business uses double-cab or extended-cab pick-up trucks, it's important to be aware of a major tax change coming into effect from April 2025.
From this date, HMRC will no longer treat most of these vehicles as vans for tax purposes. Instead, they will be classified as cars, leading to significantly higher tax costs for businesses and employees alike.
What's changing
Effective from:
- 1 April 2025 for Corporation Tax
- 6 April 2025 for Income Tax and Benefit-in-Kind (BIK)
Double-cab and extended-cab pick-ups will no longer benefit from the simpler and often more generous van tax rules. Instead, they will fall under car tax rules, affecting:
- BIK calculations for employees
- Employer National Insurance contributions
- Capital allowances for businesses
What does this mean for you?
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Tax Area
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Before April 2025
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From April 2025
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BIK for employees
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Fixed van rate (approx. £3,960/year)
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Based on list price and CO2 (up to 37%)
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Capital Allowances
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Full expensing/AIA may apply
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Standard car rate of 18% per year
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Employer NICs
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Based on van benefit
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Based on higher car benefit
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Example: A pick-up with a £50,000 list price and high emissions could result in a taxable benefit of £18,500 per year meaning a 40% taxpayer might pay £7,400 in tax annually, compared to under £1,600 now.
Transitional Relief Available
If you purchase, lease, or order a qualifying double-cab or extended-cab before 6 April 2025, you can continue using the van tax rules until the earliest of:
- The vehicle being sold or disposed of
- The end of the lease agreement
- 5 April 2029
We can help
If you'd like help assessing the impact on your company vehicles or wish to discuss alternatives, please don't hesitate to contact us. Call us on 01753 888 211 or email info@nhllp.com
we are here to help.
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