Double Cab Pick Ups – Important Changes

In the recent budget, significant changes were announced surrounding the income tax and corporation treatment of double cab pick-up vehicles. These changes may be summarised below.

Capital Allowances

Currently, all double cab pick-ups with a payload of over one tonne are classed as commercial vehicles. This means that 100% tax relief is available to the business in the year of purchase in the form of the Annual Investment Allowance or Full Expensing.

For all double cabs purchased from April 2025 onwards, these vehicles will be classed as cars for capital allowances, irrespective of their payload. This means 100% tax relief in the year of purchase will no longer be available. Instead, a writing down allowance of 6% or 18% pa will apply.

The change will impact all purchases made from April 2025 onwards. Double cab-picks ups purchased pre-April 2025 will still be classed as a commercial vehicle for capital allowance purposes if the payload is over 1 tonne.

Benefits in Kind

All double cab pick-ups purchased from April 2025 onwards will be classed as cars for benefit in kind purposes. This will likely lead to a much higher benefit in kind charge for employees/directors, as the benefit in kind charge on a commercial vehicle is typically lower than it is for a car.

Transitional rules will apply for pre April 2025 purchases. The more favourable commercial vehicle benefit in kind rate will apply until the earlier of:

• The date of disposal
• Lease expiry date
• 5 April 2029

If you are looking to purchase a double cab-pick up soon and are wondering what tax impact the timing of the purchase will have, then please feel free to get in touch with Joe Wilson on 023 8046 1237 or email Joe Wilson.