Pick-up drivers face massive tax hike in 2025

Double-cab pick-ups (DCPUs) with a payload of one tonne or more will be treated as company cars under plans revealed by the Government in the Autumn Budget.

The new rules will apply from 1 April 2025 for corporation tax and from 6 April 2025 for income tax, with double-cab pick-ups treated as cars for the purposes of capital allowances, benefit-in-kind (BIK) and some deductions from business profits. 

The rules will apply to new double-cab drivers from April 2025, which means drivers will face a significant increase in costs. Two-door, two-seat single-cab models and extended-cab models with two doors and four seats are thought to be unaffected by the move.

The changes mean a double-cab Ford Ranger 2.0-litre diesel with CO2 emissions of 230g/km will now sit in the highest BIK tax bracket of 37%, with a BIK of around £22,200 a year, leading to a tax bill of of £8880 a year for a 40% taxpayer or £13,320 a year at 60% tax or £1110 a month. 

Both figures mark a massive increase over the current fixed annual BIK charge of £3960, which is applied to all light-commercial vehicles.

For existing DCPUs, if the vehicle is purchased, leased or ordered before the implementation date, then the current rules will apply until the disposal, lease expiry or 5 April 2029 – whichever comes sooner.

The announcement from the Government comes after the previous Conservative Government announced a similar rule-change in February 2024, which it then reversed after it faced a significant backlash from the fleet sector due to the increase in costs for drivers, as well as the impact on the pick-up truck market.

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Read more: Autumn Budget 2024 and what it means for motorists >>