Starting in April 2025, HMRC will reclassify double cab pick-ups as passenger cars instead of light commercial vehicles (LCVs). This change significantly impacts tax rates for businesses and individuals, affecting Benefit-in-Kind (BIK), Corporation Tax, and Capital Allowances.
Key Tax Changes & Important Dates
- 1 April 2025 – Double cab pick-ups will be considered passenger vehicles for Corporation Tax purposes.
- 6 April 2025 – The same classification will apply to Income Tax, meaning changes to BIK and profit deductions.
How Will Taxation Change?
Currently, double cab pick-ups benefit from a flat BIK rate of £3,960 per year. However, under the new rules, BIK will be based on the vehicle’s list price and CO₂ emissions, similar to passenger cars.
For example, a Ford Ranger emitting 230g/km CO₂ would fall into the highest 37% BIK tax bracket, resulting in a taxable BIK value of approximately £22,200 per year. A company car driver paying 40% tax would see their annual bill rise to £8,880 – a massive increase compared to the current £1,584.
Capital Allowances (CA) Changes
From 1 April 2025, double cab pick-ups will no longer be classified as plant and machinery for capital allowances. Instead, they will be treated as company cars, meaning:
- 6% writing down allowance for high-emission vehicles.
- 18% writing down allowance for lower-emission vehicles.
- 100% first-year allowance for electric vehicles (EVs).
This change means businesses will lose the ability to claim full expensing or the 100% Annual Investment Allowance (AIA).
Transitional Rules – Act Before April 2025
If you purchase, lease, or order a double cab pick-up before April 2025, you can continue benefiting from the current tax treatment until:
- The vehicle is sold.
- The lease ends.
- 5 April 2029 (whichever comes first).
What Should You Do?
To avoid the tax increase, businesses and individuals considering a Ford Ranger or other double cab pick-ups should act before the April 2025 deadline. Lock in the current tax benefits now and save significantly in the long run.
For expert advice and exclusive deals, contact the Crusader Vans team today.
