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Double – Cab Pickups (DCPU) Tax Treatment

22 - 11 - 2024

The tax treatment of Double-Cab Pickups is changing from April 2025.

As of April 2025 (01.04.2025 for corporation tax and 06.04.2025 for income tax). The tax treatment of Double-Cab Pickups is changing.

 

What is a Double-Cab Pick Up?

 

A DCPU is a pick-up truck with an additional row of seats situated behind the driver.

 

What is the change?

 

Prior to April 2025 a DCPU is treated as a van for tax purposes. From April 2025 onwards a DCPU with a payload of one tonne or more will be treated as a passenger car for tax purposes.

 

What does this mean for me as an individual?

 

Where a DCPU is supplied to an employee for private use the DCPU classification for the Benefit In Kind will be as a car rather than as a van.

The current treatment of vehicles as a van for benefit in kind are much lower than for cars.

 

2024/25 Tax Year

Van BIK Rate: £3,960

Van Fuel BIK Rate: £757

Assessable BIK Income: £4,717

 

From April 2025 a DCPU will be treated as a car with the BIK based on the Vehicle’s list price an CO2 emissions.

For example

Car list price: £40,000

CO2 emissions: > 255g/km (37%)

Car BIK Rate: £14,800

Car Fuel BIK Rate: £10,286

Assessable BIK Income: £25,086

 

Will this affect my business taxable profit?

 

Yes. DCPU’s will no longer be treated as commercial vehicles for capital allowances.

Commercial vehicles normally get 100% tax relief against business profits in the year of purchase. Cars do not get 100% tax allowance. The car capital allowance is based on emissions.

 

Are there any transitional rules?

 

Yes. Where a DCPU is purchased, leased or ordered before 05 April 2025 the old rules will apply until the earlier of:

 

1.      Disposal of the vehicle

2.      Lease expiration

3.      05 April 2029

 

Once one of the above occurs the vehicle will be treated as a car.

 

What if I order a DCPU before April 2025 but pay for it after that date?

 

The contract must be entered into before the change applies. The expenditure must be incurred on or before 30.09.2025 for the transitional arrangements to apply.

 

Are there any changes to the VAT rules?

 

The VAT rules were not mentioned in the Autumn 2024 Budget. We, therefore, expect the VAT rules to remain as they currently are. In normal circumstances where a DCPU has a payload of greater than 1 tonne the business will be able to reclaim the VAT incurred on purchase.

 

For further information or help please do not hesitate to call us on:

 

01978 364 000

01244 625 500

Or email us on:

contactus@foremansllp.com

 

Whilst all due care and attention has been taken in the preparation of these notes no liability can be accepted for any omission or item contained therein.

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Fixed Data

Assumptions

General                                                                                                                              

• The user is over 21 and subject to tax in the UK
• The user wishes to minimise their tax liability
• The user is subject to national insurance i.e.he/she is not over retirement age
• Only current tax rates and limits are applied
• No tax mitigation payments are made e.g. pension contributions
• Only 3 digit letter 'L' tax codes shown in the drop down list can be entered 
• The user does not have a turnover greater than £100,000 where fewer reliefs and or higher taxes may apply

Expenses

• All miles claimed as expenses are for business use using a personally owned car or van
• All other expenses claimed are wholly, necessarily and where appropriate exclusively for the benefit of the business

Foremans LLP Charges

• Foremans fees associated with Limited Company, Sole Trader or Umbrella are as per published rates
• Foremans current Service Costs are allowed for in all calculations.

Holiday Pay

• Holiday pay is accumulated week by week by Umbrella or Agency employer but paid out during the year

VAT

• Limited Company or Sole Trader will be VAT registered
• Limited Company or Sole Trader will take advantage of Flat rate VAT
• Flat rate applied includes the benefit of the additional 1% applicable to the first year of VAT registration

Limited Company Conditions

• One director / one shareholder in a Personal Service Company
• Director of Personal Service Company elects to vote for 100% dividend after salary, costs and expenses
• Director's salary is maximum salary to the primary threshold for NI
• The Limited Company is trading normally i.e it is not subject to IR35 and is not a Managed Service Company

NOTES

• The Current tax rates are taken from the Fixed Data Table
• The current Value Added Tax Rate is 20% and is applied to all invoices and expenses as appropriate
• The Director's Salary is fixed in relation to National Insurance thresholds. Higher Rate Taxpayers should consider the advantages and disadvantages of a larger annual salary or bonus
• Higher Rate Taxpayers may wish to consider the advantages and disadvantages of shared ownership of their business
• Users with a tax code other than three digits and letter "L" may telephone or email our Development Department to request a detailed calculation
• Generally the use of an Umbrella rather than an Agency payroll is only efficient if sufficient weekly expenses are allowable and claimed
• The expenses claimed under an Umbrella should not prevent the proper operation of National Minimum Wage