Tax rules for ‘king size’ pickup trucks clarified by HMRC
Tax rules for ‘king size’ pickup trucks clarified by HMRC
As reported in previous blogs – https://kennedysaccounting.uk/budget-2024-double-cab-pick-up-vehicles-new-tax-treatment-from-april-2025-insights/ , from 6 April 2025 for corporation tax and 6 April for income tax ‘the government will treat double cab pickup vehicles (DCPUs) with a payload of one tonne [1,000 kilos] or more as cars for certain tax purposes’. (The payload is the gross vehicle weight).
This will impact employers who purchase or lease a vehicle after this date, as well as employers that reallocate a vehicle to a different employee after this date. However, where an employer transfers a pickup to a different employee between 6 April 2025 and 5 April 2029 and transitional arrangements already apply, they may continue treating it as a van for tax purposes, provided there is no disposal, and the lease has not ended.
HMRC has now clarified that variants of double cab pickups will fall under this, including extended, extra, king, and super cab pickups unless it passes one of the exemption tests. However, most cabs will be classified as cars when calculating the benefit charge from 6 April 2025.
HMRC have advised: ‘We don’t provide exact specifications for every subcategory of this type of vehicle. Crucially, they are all double cab pickups (DCPUs), often with a more compact cab area.’
For example, the new rules could mean that the benefit in kind (BIK) amount of £22,000 with private fuel being provided could create a taxable benefit of £32,634. Based on these figures, a higher rate taxpayer could have a tax liability of £13,054, with the employer Class 1A charge at £4,895. This is a significant increase from the maximum of £8,192 before the change.
The two-part test to determine this includes the construction year of the vehicle, and whether the vehicle was originally constructed for the purpose of carrying goods.
HMRC has stated: ‘typically these vehicles are equally suited to convey passengers and goods and have no predominant suitability’.
According to data, UK Motor Trade Association light commercial vehicle registrations went up in February, with the best reported performance for this month in 26 years. Companies may be getting their orders in for double cab pickups before the legislative changes, even if they do not get delivered until later in the year. However, these statistics include van sales as well.
Also reported was the number of 4×4 registrations, which will predominantly be pickup trucks, which rose by 108.3%, and pickup trucks specifically rose by 21.2%, which is an unusual trend with February usually reported as a slow month for vehicle sales as it is before the new registration plates are dispatched.