Tax Changes for Pick-Up Trucks: What Local Businesses Need to Know

Starting 6 April 2025, double-cab pick-up trucks—such as the Ford Ranger, Toyota Hilux, and Isuzu D-Max—will be reclassified from vans to passenger cars for tax purposes. This change stems from a 2020 Court of Appeal ruling and will significantly impact how these vehicles are taxed under UK law.

Under the new rules, Benefit-in-Kind (BIK) tax will no longer be a flat rate of £3,960. Instead, it will be based on the vehicle’s list price and CO₂ emissions. For example, a £40,000 pick-up emitting 230g/km CO₂ could result in a BIK charge of £13,875, leading to an annual tax bill of over £5,500 for higher-rate taxpayers. Additionally, capital allowances will be reduced from 100% first-year allowances to writing-down allowances of 6% for high-emission vehicles, affecting cash flow and tax relief.

Businesses have a window of opportunity to mitigate these changes. If you purchase or lease a double-cab pick-up before 6 April 2025, you can continue to benefit from the current tax treatment until 5 April 2029, or until the vehicle is sold or the lease expires.

At McKendrey Accountants LTD, we understand the vital role these vehicles play in your business operations. We are here to help you navigate these changes, assess the financial impact, and explore strategies to minimise your tax liabilities. Contact us today to discuss how we can support your business through this transition.