‘Order now to avoid higher tax bill on double-cab pickups’

• Vehicles reclassed as company cars

• Due to come into effect from April

• Other changes come into force too

Farmers in the market for a double-cab pickup (DCPU) are being advised to move quickly to get ahead of changes to the tax regime.

From next month, double-cab pickup trucks will be reclassified as cars rather than vans for taxation purposes. It means farmers who rely on these vehicles for their operations could face a much higher tax bill.

Reclassification

An alternative is to purchase or order a double-cab pickup before April. Doing so will mean the vehicle retains its commercial classification until 5 April 2029 – or when it is disposed of, or when the lease expires – whichever is earlier.

The change was announced in last autumn’s Budget. As a result, farmers are being urged to consult with tax professionals to understand the full impact on their operations – and explore potential strategies to mitigate increased tax burdens.

Previously, double-cab pickups were taxed as vans, resulting in lower Benefit In Kind (BIK) rates for employees using these vehicles privately. With the reclassification, these vehicles will now attract higher BIK taxes associated with cars.

From 6 April, double cab pickups will be treated as cars for BIK purposes, transitioning from a flat rate to a variable rate based on CO₂ emissions. For capital allowance purposes, this reclassification begins on 1 April.

For self-employed farmers, the reclassification means double-cab pickups will no longer qualify for the more generous capital allowances available to vans. Instead, they will be subject to car rates, with 6% of the vehicle’s cost deducted in the first year.

VAT recovery

The change in classification may also affect VAT recovery. Businesses could face restrictions on reclaiming VAT for vehicles now considered cars – especially if private use is involved.

This adjustment could see increased costs for farmers who previously benefited from full VAT recovery on these vehicles. The increased tax liabilities may see farmers reassess their vehicle choices, potentially opting for more tax-efficient vehicles that may not offer the same functionality.

Manufacturers have launched campaigns to inform customers of the changes and encourage timely action to benefit from current tax advantages. Acting promptly will avoid increased costs due to the new tax treatment, says Isuzu.

‘Tax burden could increase by 211%’ – study

The tax burden on a typical double-cab pickup by as much as 211% after April, suggests new analysis by the Countryside Alliance.

Thousands of farmers, gamekeepers, builders, electricians and other tradespeople will be affected by the government’s decision to reclassify double-cab pickups  as company cars for tax purposes.

This is because – for the purposes of capital allowances, benefits in kind (BIK) and some deductions from business profits – these vehicles will no longer be treated as essential tools of the trade.

A typical double-cab pickup priced at £33,265 and emitting 167g/km of CO₂ will see its benefits in kind (BIK) allocation rise from £3,960 to £12,308, according to a study by the Countryside Alliance. The BIK on private fuel benefits will also soar from £757 to £10,286.

But self-employed tradespeople will arguably face the biggest blow. They can only deduct 6% of their vehicle’s cost in the first year, slashing potential tax savings from over £9,600 to just £578.84.

In a statement, Countryside Alliance chief executive Tim Bonner said: “Chancellor Rachel Reeves’ pickup truck tax will hammer thousands of working people in the countryside and beyond.

“From farmers and gamekeepers to plumbers and builders the twin cab pickup has become the country’s favourite workhorse. The decision to reclassify them as cars will hit working people hard.”

Disclaimer

This article is for informational purposes only and does not constitute professional tax advice. Businesses should consult with a qualified tax advisor to determine the specific implications of these changes for their individual circumstances.