From April 6, 2025, HMRC will reclassify double-cab and extended-cab pickup trucks as company cars, dramatically raising Benefit-in-Kind (BIK) taxes, slashing capital allowances, and levying such heavy charges that many owners face a staggering 400% tax hike.
At a Glance: Key Figures & Facts
| Category | Details |
|---|---|
| Affected Vehicles | Double-cab and extended-cab pickups (not single-cab models) |
| Effective Dates | Corporation Tax: from 1 April 2025; BIK & capital allowances: 6 April 2025 |
| Tax Increase Examples | Ford Ranger Wildtrak: tax jumps from £1,608 to £8,322 per year (~400%) |
| Top BIK Band | Vehicles in 37% CO₂ emissions band, taxed by emissions & list price |
| Higher-Rate Taxpayer Example | A £40K pickup: BIK tax could rise to £10,094 per year (~432% increase) |
| Transitional Relief | Vehicles bought/leased before 6 April 2025 retain old rules until 2029 |
| Primary Concerned Groups | Farmers, builders, tradespeople, rural businesses |
What’s Changing and Why
1. Reclassification of Pickups
Previously, many double-cab pickups qualified as commercial vehicles if they had payloads of one tonne or more, benefiting from fixed, low-rate BIK taxes and generous capital allowances. From 2025, HMRC will treat these as cars, with taxes based on CO₂ emissions and vehicle list price. ([turn0search1],
2. Sharp Rise in Tax Bills
This reclassification means tax bills can skyrocket—for example:
- A Ford Ranger Wildtrak on a 40% tax rate may see annual tax rise from £1,608 to £8,322, a 400% hike.
- A £40K pickup with high emissions could cost a higher-rate taxpayer £10,094 in BIK, marking a 432% increase in tax liability.
3. Capital Allowance Reduction
Capital allowances for these pickups will fall from 100% first-year relief to a standard 18% writing-down allowance, delaying tax relief and straining business finances.
4. Transitional Provisions
Owners who purchased, leased, or ordered these pickups before 6 April 2025 can continue using the older, favorable tax regime until disposal, lease expiry, or 5 April 2029, whichever is earlier.
5. Impact on Key Sectors
Farmers, builders, and rural tradespeople have voiced alarm over the new costs—arguing that double-cab pickups are indispensable tools for work and that these changes impose an unaffordable tax burden. Supporters of tax reform argue the old rules were being misused by high-emission vehicles.
HMRC’s reclassification of double-cab and extended-cab pickups marks a major policy shift—transforming them from relatively tax-efficient commercial assets into high-cost company cars.
With tax liabilities increasing up to 400%, and important sectors feeling the squeeze, it’s imperative for businesses and individuals to review vehicle strategies fast.
Transitional relief offers temporary relief—but only for those who act before the April deadline. Planning ahead is now essential to reducing financial strain.
FAQs
Double-cab and extended-cab pickups—those with more than two seats—will be treated as company cars for tax purposes; single-cab models remain classified as commercial vehicles.
Some drivers—especially higher-rate taxpayers—could see their BIK tax rise by as much as 400–430%, with annual bills jumping from £1,600 to over £8,000–£10,000.
Yes. Vehicles acquired before 6 April 2025 benefit from transitional relief and can keep the old tax treatment until lease expiry, disposal, or 5 April 2029—whichever comes first.
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