Yes. Since April 2025, most double cab pickups are treated as cars, not vans, for benefit in kind and capital allowances. For an employee or director with private use, the tax bill can be several times higher than under the old van rules. For the business, the cost no longer qualifies for the Annual Investment Allowance.
Pickups bought, leased or ordered before 6 April 2025 can keep van treatment for benefit in kind for a limited time.
What changed
For tax purposes, a van is a goods vehicle with a design weight of up to 3,500kg, designed primarily for carrying goods. HMRC previously accepted that a double cab pickup with a payload of one tonne or more was a van.
Following a Court of Appeal decision on how to classify vehicles of this kind, HMRC changed its approach. A double cab pickup is now generally treated as a car because it is not designed primarily for goods. This applies:
- for benefit in kind from 6 April 2025
- for capital allowances from 1 April 2025 for companies and 6 April 2025 for unincorporated businesses
The transitional rules
For benefit in kind, a pickup bought, leased or ordered before 6 April 2025 keeps van treatment until the earliest of:
- the date it is disposed of
- the date the lease ends
- 5 April 2029
After that, car rules apply. Replacing an existing pickup with a new one brings the new vehicle into the car rules straight away.
A worked example: benefit in kind
A director has a diesel double cab pickup with a list price of £40,000, available for private use, with fuel paid by the company. Most diesel pickups have CO2 emissions high enough to fall into the top band, 37 percent of list price.
As a van for 2026/27: van benefit £4,170 plus van fuel benefit £798, a total of £4,968. At 40 percent, the director pays £1,987 in tax. The company pays Class 1A National Insurance at 15 percent, which is £745.
As a car for 2026/27: car benefit is £40,000 x 37 percent, which is £14,800. Car fuel benefit is £29,200 x 37 percent, which is £10,804. The total is £25,604. At 40 percent, the director pays £10,242 in tax, and the company pays Class 1A of £3,841.
The combined annual cost rises from about £2,700 to about £14,000. Removing private fuel saves a large part of that.
Capital allowances
As a van, a pickup qualified for the Annual Investment Allowance, so a company could deduct the full cost in the year of purchase. As a car, it never qualifies for the Annual Investment Allowance.
A pickup with CO2 emissions above 50g/km goes into the special rate pool at 6 percent a year. On a £40,000 vehicle, the first-year allowance is £2,400. At 25 percent corporation tax, that is a saving of £600 in year one, compared with £10,000 when the whole cost was deductible.
A new zero-emission pickup would qualify for the 100 percent first-year allowance for zero-emission cars, which runs to March 2027, and benefit in kind at 4 percent of list price for 2026/27.
If the pickup is leased and emits over 50g/km, 15 percent of the lease rentals are disallowed for tax.
Is a true van still a van?
Single cab pickups and conventional panel vans are unaffected. Each vehicle should be looked at on its own facts, considering its design and primary purpose. The VAT treatment is decided separately, so do not assume the VAT position has changed with the direct tax rules.
What to do
- List any double cab pickups in the business and when each was bought, leased or ordered.
- Diary when transitional van treatment ends for each one.
- Recalculate benefit in kind on car rules for any acquired from 6 April 2025.
- Consider whether private fuel should continue.
- Before replacing a pickup, compare the after-tax cost with a van or an electric alternative.
If you would like us to run the figures on your vehicles, book a free call.
