HM Revenue & Customs (HMRC) has updated its guidance on what’s considered to be a double cab pickup in a move to clarify which vehicles are subject to the changes coming in this April.
The Autumn Budget 2024 announced that double cab pickups will be treated as company cars from 1 April 2025 for corporation tax purposes, and 6 April 2025 for income tax. After this dates, double cab pickups will be treated as cars for capital allowances and Benefit-in-Kind taxation.
The new guidance, published in the latest Employer Bulletin, follows up on this and tightens the definition to ensure extended, extra, king and super cab pickups are clearly covered by the new rules, ending confusion for businesses and motorists.
Initially, HMRC defined double cab pickups as having a front passenger cab that contains a second row of seats and is capable of seating about four passengers, plus the driver, as well as having four doors capable of being opened independently (two-door versions are normally accepted to be vans) and an uncovered pickup area behind the passenger cab.
However, this updated definition has now removed the requirement for all four doors to be independently opening and states the vehicle must have “four doors, whether the rear doors are hinged at the front or the rear” to be considered a double cab pick-up for BiK purposes.
HMRC said most double cab pickups will likely be classified as cars for Benefit-in-Kind purposes, including extended, extra, king and super cab pickups that were previously not in scope of the rules.
Most double cab pickups are now expected to be classed as company cars for BiK because these vehicles are typically “equally suited to convey passengers and goods and have no predominant suitability”.
HMRC said the new definition confirms the position in relation to extended, extra, king, and super cab pickups whilst reaffirming that the VAT position remains unchanged.
Under the VAT approach, double cab pickups are classified based on payload capacity, with anything under one tonne classified as a car, and anything a tonne and over as a van. This rule was replicated as a pragmatic way of resolving the primary suitability and classification of double cab pickups.
But HMRC says the VAT approach is at odds with the Court of Appeal ruling in the Payne & Ors (Coca-Cola) v R & C Commrs legal case. The 2020 tax case saw HMRC successfully argue that Volkswagen Kombis and Vauxhall Vivaros on the Coca Cola fleet should be classed as company cars, not vans, and taxed accordingly.
Transitional arrangements will apply for employers that have purchased, leased, or ordered a double cab pickup before 6 April 2025, whereby they will be able to rely upon the previous treatment until the earlier of disposal, lease expiry, or 5 April 2029.
For an opinion on why double cabs shouldn’t be taxed as company cars, please click here.
