IMPORTANT: This decision has now been reversed. Please see the latest update here.
HM Revenue & Customs have confirmed that from 1 July 2024 double cab pickups will be classed as a car, rather than as a van, for benefits in kind purposes. The HMRC guidance can be found here.
Tax Cost for the Employee/Director Receiving the Benefit
Assumes a £40,000.00 (original list price) double cab pickup truck with CO2 emissions of 160g/km or higher.
| Basic rate taxpayer | Old rules | New rules |
| Tax on the vehicle benefit | £792.00 | £2,960.00 |
| Tax on the fuel benefit | £151.40 | £2,057.20 |
| Total tax per year: | £943.40 | £5,017.20 |
| Higher rate taxpayer | Old rules | New rules |
| Tax on the vehicle benefit | £1,584.00 | £5,920.00 |
| Tax on the fuel benefit | £302.80 | £4,114.40 |
| Total tax per year: | £1,886.80 | £10,034.40 |
Currently, if a double cab pickup is used solely for commuting and business journeys then no benefit in kind arises. This rule is not applicable to cars.
Capital Allowance Rules
Under the current rules, a double cab pickup may be eligible for an immediate offset against the profits of the employer at their highest rate of tax. However, tax allowances for cars are dependent on their CO2 emissions. With the high CO2 emissions of double cab pickups the allowances will be restricted into the special rate tax pool, which only allows tax relief of 6% of the cost price. This would mean a significant delay to when the tax relief is received.
Timing
The new rules only apply to double cab pickup trucks acquired on or after 1 July 2024. Any existing pickups will remain under the old ‘van’ rules until they are disposed of, the lease expires, or up to the 5 April 2028, whichever comes first.
If a double cab pickup is under a formal purchase agreement prior to the 1 July 2024, but the pickup is not delivered until after the 1 July 2024, then this will continue to be classed as a van as if it were in place before 1 July 2024.
This could mean an improved tax position for fully electric double cab pickup trucks, as they would pay less tax as a ‘car’ than as a ‘van’, if allowed for private use.