Double cab pickup classification

Blog Double Cabbed

**Since this article was published, HMRC have updated their guidance on 19th February 2024 on the tax treatment of Double Cab Pick Ups (DCPUs). HMRC have today announced that its existing guidance will be withdrawn, meaning that DCPUs will continue to be treated as goods vehicles rather than cars, and businesses and individuals can continue to benefit from its historic tax treatment.

HMRC have announced new rules which will change the way double cabbed pickups are taxed from July 2024.

These pickups have been classed as vans and as such attracted relatively low benefit in kind tax. This has been a grey area and has caused some controversy, with double cabbed pick ups becoming more and more luxurious.

The classification was tested in the Coca-Cola case, where HMRC won a case on this issue and the Court found that the pick up was a car. It is this decision that they now seeking to put into statute.

Bizarrely, the new rules will come into effect part way through the tax year, taking effect from the 1st July 2024.

Transitional rules will mean that vans bought before the 1st July can apply the old rules until the earlier of disposal, lease expiry or the 5th April 2028. It is likely therefore that there will be surge for demand for these trucks over the next few months.

Single cab pick ups will continue to be classed as van, if their payload is over a tonne and as such the favourable tax treatment will remain.

Currently the taxable benefit on a van is £3,960. If taxed at 40% that would mean a tax charge of £1,584. In the case of a Ford Ranger, this could jump to as much as £8,800.
In addition, employers could see their NI bill jump from £546 to £3,063.

Interestingly, VAT treatment is not set to change on these vehicles, which causes an element of confusion and complexity. This will mean VAT can still be reclaimed on these vehicles, subject to any private use adjustment.

If you want to speak a member of the team about any of the points in this article, get in touch.

Posted in Blog.