Budget 2024 – Double Cab Pick-up vehicles – new tax treatment from April 2025
Budget 2024 – Double Cab Pick-up vehicles – new tax treatment from April 2025
As the detail behind the Autumn Budget announcements continues to be scrutinised, a significant change to the treatment of double cab pick-ups (DCPU) is included in the changes – which is yet another U turn in this saga.
The changes which come into effect from April 2025 mean that all DCPUs will be treated as cars for specific tax purposes, including capital allowances, benefits in kind and certain deductions from business profits, with the ‘specific rationale’ being that where no clear predominant suitability for carrying goods can be identified, the default shall be that a vehicle is a car.
Impact on individuals – Benefits in Kind (BIK)
From 06 April 2025, DCPU’s will be treated as cars for BIK purposes. The difference here can be very significant. Before you go ahead and invest in one of these vehicles, please speak with us to gain a full understanding of how having this vehicle could affect your tax.
Impact on businesses – Capital Allowances
The new revised treatment means DCPUs will no longer benefit from the capital allowance regime typically applied to commercial vehicles, instead they will be treated as cars. Whereas commercial vehicles ordinarily get 100% tax relief against business profits in the year of purchase, cars do not. The capital allowances available for cars are based on emissions.
Transitional Arrangements
Although these changes will apply from April 2025, there are transitional arrangements which will protect some, for example, where a DCPU is purchased, leased, or ordered before 05 April 2025, the old rules shall apply to that DCPU until the earlier of:
- Disposal of the vehicle;
- Lease expiration; or,
- 05 April 2029
From the point that one of these events occur, any new or existing DCPUs shall be treated as a car.
If you are considering getting a DCPU before April 2025 so that you can get a replacement vehicle under the current van rules which shall apply until April 2029, you will need to bear in mind the April 2029 back-stop date when considering finance options on the vehicle. A lease/hire purchase that extends past this point will likely mean that you will suffer these cars tax charges at some stage.