It was announced at Autumn Budget 2024 that the question as to whether a double cab pick-up is a car or a van will not be decided purely on the basis of weight. This policy will apply from 6 April 2025.
This policy change aims to solve a long-standing problem for both HMRC and taxpayers who are currently bound to follow the reasoning of a 2020 Court of Appeal precedent in deciding whether a double cab pick-up is a van or not.
Current rules: up to 5 April 2025
For the purposes of the taxation of Benefits In Kind (BIK) and Capital allowances, HMRC use the definition of a car as is used for VAT purposes.
In theory, this means that HMRC accept that vehicles such as 'double cab pick-ups' with a payload of 1,000kg or more, being primarily suited to the conveyance of goods, were goods vehicles and not cars.
Contentious cases are to be decided based on prevailing practice and this has been set by the Court of Appeal's decision in Payne & Ors v HMRC [2020] EWCA Civ 889 (the Coca-Cola case) which considered the BIK status of VW Kombis and Vauxhall Vivaros which had been modified to include crew seating. It decided that they were cars.
New rules: from 6 April 2025
Double cab pick-up vehicles with a payload of one tonne or more will no longer be treated as goods vehicles but will instead be cars for BIK purposes.
Classification of double cab pickups will therefore need to be determined by assessing the vehicle as a whole at the point that it is made available to determine whether the vehicle construction has a primary suitability as per the two-part test outlined at EIM23115 onwards.
Transitional arrangements
Transitional arrangements will apply for employers who have purchased, leased, or ordered a double cab pick-up before 6 April 2025. They will be able to use the previous treatment, until the earlier of disposal, lease expiry, or 5 April 2029.
Budget accouncement:
2.19 Tax treatment of double cab pick-up vehicles
As announced at Autumn Budget 2024 and following a Court of Appeal decision, the government will not introduce legislation to maintain the treatment of double cab pick-up vehicles with a payload of one tonne or more as goods vehicles.
HMRC is updating guidance to clarify the position in respect of such vehicles which will be treated as cars for capital allowances, for benefits in kind and for some deductions from business profits. Transitional arrangements will also apply.
Useful guides on this topic
Company cars
Company car tax. How do you work out car benefit? How do you work out car fuel benefit? Are there savings for low-emissions vehicles? How do you reduce car benefit? Cars and the tax tribunals and Top Tax Tips.
Vans and Commercial vehicles
What is the benefit in kind charge if you drive a company van? What is van fuel benefit? What is the tax on zero-emissions vans?
Pool cars
What is a pool car? How is it taxed? When does it become a benefit? What are the rules? Is it still worth having them?
Van Benefit Charges
A taxable benefit in the form of a Van Benefit Charge (VBC) arises when an employee is provided with a company van and it is used for personal journeys.
Car fuel benefit charges
What is the car fuel benefit charge? How do you apply it?
CO2 emissions: Ultra-low emission cars from 2019-20 onwards
CO2 emissions bands and percentages that apply to company cars from 2019-20 to 2027-28.
Cars & Vans: VAT
What is a car for VAT? What is a van for VAT? What VAT can be recovered on a car that is bought? Leased? What about fuel? Or mileage reimbursements?
Cars & Vans & Wheelers: Allowances
What capital allowances are available for vehicles? How does HMRC classify what is a car or what is a van?
External links
EIM23151 - Car benefit: double cab pickups 6 April 2025 onwards
