Pick-up drivers face massive tax hike in 2025
Autumn Budget could leave pick-up owners facing a 236% increase in BIK tax, with a Ford Ranger costing up to £9360 more annually...
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 both new and existing 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.
Transitional BIK arrangements will apply for employers that have purchased, leased, or ordered a double cab pick-up before 6 April 2025. The Treasury also says they will be able to use the previous treatment, until disposal, lease expiry or a fixed date of 5 April 2029, whichever is 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.
For all the latest reviews, advice and new car deals, sign up to the What Car? newsletter here
