11:38 am, February 15, 2024
Double cab pick-up trucks are to be classed as cars from July in a major tax shake-up that closes a loophole.
They have become increasingly popular as they’re suitable as a working vehicle as well as for personal use.
Many people have also bought one for the tax breaks they offer, as any double cab with a payload of more than a tonne was regarded as a van, so attracted much lower company car tax.
However, HM Revenue and Customs (HMRC) has quietly announced in a note that this’ll change from July 1.
It says this is because the vehicles are ‘equally suited’ to transporting goods as well as passengers.
Company vehicle tax is based on benefit in kind (BIK), which for cars is a percentage based on their CO2 emissions that takes into account a vehicle’s list price. It favours electric and hybrid cars, which emit lower CO2.
However, BIK for pick-ups is currently based on a flat rate of £3,960 for the 2023/2024 tax year. For a 20 per cent taxpayer, van BIK is £792 per year, or £66 a month. For 40 per cent taxpayers, it’s £1,584 per year, or £132 a month.
Under these changes, pick-ups will become significantly more expensive for company car tax, because it’ll be calculated according to their typically high CO2 emissions.
A Ford Ranger – the UK’s most popular pick-up and the fourth best-selling ‘van’ in the UK last year – has CO2 emissions of more than 200g/km, putting it in the highest BIK tax bracket of 37 per cent.
According to Professional Pickup, from July 2024 a driver using a Ford Ranger Wildtrak 2.0 as a company car will face a tax bill of £290 a month, or £580 a month for a higher rate taxpayer.
It means a driver could end up spending £5,376 more on company car tax per year under these new rules, making a double cab pick-up uneconomical to run and likely to cause demand for these vehicles to fall.
Any new double cab pick-ups ordered or leased until June 30, 2024 will still qualify for the current lower tax rates, even if they aren’t registered by July.
Single-cab pick-ups are unaffected by the change.
