What the new tax rules around double cab pick ups mean for your business 

If you’re using a double cab pick up as a company vehicle, this change will affect you. 

Among all the headline tax changes in the Autumn Budget 2024 was a blink-and-you’ll-miss-it detail about the treatment of double cab pick-up trucks for tax purposes.

From April 2025, double cab pick-up trucks with a payload capacity of one tonne or more will no longer be classified as commercial vehicles, but as cars for certain tax purposes.

How will the reclassification affect small business owners?

These tax changes will result in an increase in tax payable by both businesses and employees. Here’s how it will affect the following tax treatments:

Capital allowances

Capital allowances allow you to deduct part of the value of a business asset from your profits before you pay tax.

Once double cab pick-up trucks are reclassified as cars, they will no longer qualify for the following capital allowances:

• Annual investment allowance
• Super-deduction
• Full expensing
• 50% first-year allowances

This means that businesses can claim less tax relief against double cab pick ups than previously. 

Benefit in Kind

Business vehicles don’t attract Benefit in Kind tax when personal use is insignificant. Whereas, company cars are classified as a Benefit in Kind, meaning that the cost is added to your income tax bill.

From the 2025/26 tax year, which begins on Sunday 6th April 2025, double cab pick ups will no longer be classified as a goods vehicle, but as a company car. Therefore, they will be liable for Benefit in Kind tax, whether used solely for work or not.  

Benefit in Kind tax, or company car tax, is calculated on the list price of the car, its CO2 emissions and your own income tax. As hard-working, off-road vehicles, double cab pick ups don’t usually fare that well on CO2 emissions. Most will attract the highest CO2 emissions rate of 37 per cent. This tax liability will fall on sole traders and employee.  

When does the reclassification of double cab pick ups come into effect? 

From 1st April 2025 for Corporation Tax and 6th April 2025 for income tax, double cab pick ups will be treated as cars for the purposes of capital allowances, Benefits in Kind and some deductions from business profits. 

This reclassification of double cab pick up trucks will apply to all double cab pick ups purchased or leased on or after 6th April 2025. For any double cab pick up purchased before April 2025, the existing capital allowances treatment will apply. 

For employers that have purchased, leased or ordered a double cab pick up before 6th April 2025, transitional Benefit in Kind arrangements will apply. If this applies to you, you will be able to use the previous treatment until either disposal, lease expiry or 5 April 2029 – depending on which comes first. Full information can be found here.  

What should I do now? 

If you are planning to buy a new business vehicle this year, it will pay to take advice. 

Plan with these changes in mind and consider whether an alternative vehicle could work for your business instead.

Our friendly, experienced team will guide you through your options to find the deal that best meets your business needs. Apply online today in minutes and an Account Manager will contact you to review your options.

13/03/25: While we want to help as much as we can, the information found here is provided solely for informational purposes and should not be considered financial or legal advice. To the extent permitted by law, Funding Circle does not accept any liability for any loss or damage which may arise directly or indirectly from the use of, or reliance on, the information contained here. If you have any questions, please speak to your professional adviser or seek independent legal advice.