News

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.