Further tax changes on double cab pick-ups

The tax treatment of double cab pick-ups (DCPUs) has once again been changed so that such vehicles with a payload of one tonne or more will in future be treated as cars for tax purposes, particularly for calculation of benefit in kind charges and capital allowances.

The reclassification takes effect from 1 April 2025 for corporation tax and from 6 April 2025 for income tax on the purchase or lease of a DCPU.

This change was announced in the Chancellor’s 2024 Autumn Budget.

HMRC had previously updated its Employment Income and Capital Allowances manuals to explain that, from 1 July 2024, most, if not all, DCPUs would be treated as cars for tax purposes stating that “this is because typically these vehicles are equally suited to convey passengers and goods and have no predominant suitability.”

Lucy de Greeff, Director, and a member of the firm’s Land and Rural Practice Group, says:

“This will be a blow to many farm and estate businesses as these vehicles are multi-purpose and a workhorse for many farm concerns.”

There is a transitional period for employers who purchase, lease or who have placed an order for a DCPU before the change date of 6 April 2025 who will continue to qualify for a 100% tax deduction in the first year through the Annual Investment allowance (or full expensing where bought new and unused. They will also be able to continue to use the previous tax treatment at either disposal, lease expiry or the given date of 5 April 2029, whichever is the sooner.

For any further information get in touch with Lucy de Greeff.