From April 2025, HMRC is implementing significant changes in the classification of Double Cab Pickups (DCPUs) impacting a range of tax treatments, including Benefit-in-Kind (BIK) taxation, capital allowances, and deductions from business profits.
DCPUs are defined as vehicles with two rows of seats in the front passenger cab, at least four passengers, four independent doors, and an uncovered pickup area behind the passenger cab. This includes variants like extended, extra, king, and super cab pickups.
Historically treated as commercial vehicles, most DCPUs will now be treated as cars. They will no longer benefit from the flat rate Benefit in Kind (BIK) rates (£3,960) and will be subjected to the rates applicable to cars (2-37% depending on the vehicle’s CO2 emissions). Reduced capital allowances will also apply, with the inability to write off 100% previously available under plant and machinery classifications, with businesses expecting only to write off between 6-18% per year based on CO2 emissions.
The Court of Appeal’s 2020 ruling in Payne & Ors (Coca-Cola) v R & C Commrs concluded that the DCPUs are “equally suited to convey passengers and goods and have no predominant suitability” so by default should be treated as cars. Vehicles “of a construction primarily suited for the conveyance of goods or burden of any description” will remain “vans” for classification purposes, but most DCPUS will now be deemed “cars”.
VAT treatment remains unchanged. All double cab pickups with a payload over 1 tonne continue to qualify for VAT reclaims if the purchasing business is VAT registered.
HMRC has confirmed that transitional arrangements will apply for employers that have purchased, leased, or ordered a DCPU before April 2025 and previous tax treatments will continue until the vehicle’s disposal, lease expiry, or until 05 April 2029. Businesses are advised to keep proper documentation to prove their eligibility for the transitional rules.
The transitional changes may reduce the demand for DCPUs, though there may be a short-term increase in sales prior to the April 2025 deadline.
For further information or advice, businesses should consult their tax advisors.
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