Isuzu UK clears the air over pick-up tax changes

There is widespread misunderstanding regarding the extent of tax changes to pick-up trucks introduced in April, according to new research from Isuzu UK. It shows that almost three-quarters (71%) of pick-up buyers, 68% of accountants and 59% of non-Isuzu dealers are still uncertain about how the changes affect VED and VAT.

This, says Isuzu, has led to unnecessary concerns, especially among agriculture, construction and other commercial sectors that rely on pick-ups as working vehicles.

Alan Able, managing director of Isuzu UK, said: “We want to reassure the public and business owners that VAT remains reclaimable and VED is still at the commercial rate. These benefits continue to support tradespeople, farmers and fleet operators across the UK.”

The Government announced in the Autumn Budget that double and extended cab pick-up trucks would be treated as company cars for tax purposes from April this year, dramatically increasing the benefit-in-kind (BIK) tax paid by drivers. 

The change in legislation originates from a Court of Appeal ruling, which found that double and extended cab pick-ups do not demonstrate a predominant suitability for transporting goods over passengers. As a result, HMRC has moved to classify these dual-purpose vehicles as cars for the purposes of BIK, capital allowances and deductions from business profits.

It is important to clarify, however, that single cab pick-ups are unaffected by this change and will continue to be treated as commercial vehicles in all respects. Vehicle excise duty (VED), also known as road tax, remains at the commercial level of £345 per year and VAT is still fully reclaimable on vehicles with a one‑tonne payload for VAT‑registered businesses.

Capital Allowance rules were also changed as of April 1, 2025, for corporation tax and April 6 for income tax. Double and extended cab pick-ups are no longer eligible for treatment as ‘plant and machinery’ and are now taxed in line with company car writing-down allowances, which are calculated based on CO₂ output. These rates can be 6%, 18%, or 100% for zero-emission vehicles.