The end of the road for van tax on double cab pickups?

For years, double cab pickups have been a tax-efficient choice for businesses, thanks to their classification as vans rather than cars.  

This has meant lower benefit-in-kind (BIK) charges for employees and reduced tax liabilities for employers.  

However, from 6 April 2025, the tax treatment of most double cab pickups will change, bringing a cost increase for many businesses and drivers. So, how much longer will they enjoy van tax rates, and what should businesses do to prepare? 

How are double cab pickups taxed now? 

Under current tax rules, a double cab pickup with a payload of at least one tonne is classed as a van for tax purposes. This brings key benefits: 

• A fixed BIK charge for private use (£3,960 for 2024-25). 

• A set fuel charge for private use (£757 for 2024-25). 

• Lower overall tax costs than company cars. 

This classification aligns with VAT rules, which define a goods vehicle based on payload capacity. However, from April 2025, the taxman is taking a different approach. 

What is changing from 6 April 2025? 

HM Revenue & Customs (HMRC) will no longer use VAT rules to determine whether a vehicle is a van or a car for tax purposes. Instead, they’ll apply a primary suitability test: 

• If a vehicle is equally suited for carrying passengers and goods, it will be treated as a car, not a van. 

• Most double cab pickups meet this definition, meaning they will fall under car tax rules. 

Why does this matter? Because company cars are taxed differently: 

• The BIK charge is based on list price (P11D value) and CO2 emissions, not a fixed sum. 

• For many employees, this means a substantial tax increase. 

• Employers will also see higher National Insurance contributions (NICs) on these vehicles. 

How long do the old rules apply? 

If you own or lease a double cab pickup before 6 April 2025, you can continue using the van tax treatment under transitional rules, but only for a limited time. The old rules remain in place until whichever of the below comes first: 

• The vehicle is sold or disposed of. 

• The lease expires. 

• 5 April 2029. 

Real-world scenarios 

To put this into perspective, here’s how the new rules will work in practice: 

• Buying a new pickup after 6 April 2025? It will be taxed as a car. 

• Leased a pickup before 6 April 2025? You can still benefit from van tax rules, but only until the lease ends or 5 April 2029. 

• Ordered before the cut-off but delivered later? If the agreement was made before 6 April 2025, the van tax treatment applies until disposal, lease expiry, or April 2029. 

What should businesses do now? 

If your business relies on double cab pickups, consider purchasing or leasing before April 2025 to lock in the existing tax benefits. 

Prepare for increased tax costs as employees using pickups for personal travel could see their tax bills rise sharply under the new rules. 

The tax implications can be complex and could mean a major financial impact for businesses using double cab pickups.  

For professional advice, please contact our team of accountants today.