Pickup trucks lose commercial vehicle status

From 1 April 2025 for corporation tax and 6 April 2025 for income tax, DCPUs will be treated as cars for the purposes of capital allowances, benefit-in-kind tax and some deductions from business profits. The existing capital allowances treatment will apply to those who purchase DCPUs before April 2025.

Transitional benefit-in-kind arrangements will apply for employers that have purchased, leased or ordered a DCPU before 6 April 2025.

The changes are likely to result in big BiK charges for drivers and Class 1A NICs for businesses, along with less beneficial capital allowances for applicable vehicles.

The change follows a 2020 Court of Appeal ruling that most multi-purpose vehicles, such as double cab pickups, are cars. Under the Conservative government, HMRC issued new tax guidance on 12 February 2024 announcing that double cabs with a payload of one tonne or more would be treated as cars rather than goods vehicles for both capital allowances and benefit-in-kind purposes from 1 July 2024.

The move was meant to address a loophole whereby some double-cab pickup drivers pay less tax than on traditional company cars, but resulted in an uproar among the farming and motoring sectors and the previous administration scrapped the plans a week after they were announced.

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