More pick-up trucks affected by massive company car tax hike
Yet more pick-up truck drivers are to be hit with massive tax hikes following confirmation that even more models will be reclassified as cars.
In October's Autumn Statement, it was revealed that double-cab pick-ups with a payload of one tonne or more were to be treated as company cars. However subsequent rewording of the rules means that models with four-seats and rear-hinged rear doors also face reclassification.
The result is that, as well as double-cab pick-ups, models referred to as extended, king cabs or super cabs, such as the Isuzu D-Max Extended Cab and Toyota Hilux Extra Cab will now be subject to company car tax. Single cabs or other pick-ups with a single row of seats remain classified as commercial vehicles.
The new rules will apply from 1 April 2025 for corporation tax and from 6 April 2025 for income tax, with double-cab pick-ups treated as cars for the purposes of capital allowances, benefit-in-kind (BIK) and some deductions from business profits.
The rules will apply to new double-cab drivers from April 2025, which means drivers will face a significant increase in costs.
The changes mean a double-cab Ford Ranger 2.0-litre diesel with CO2 emissions of 230g/km will now sit in the highest BIK tax bracket of 37%, with a BIK of around £22,200 a year, leading to a tax bill of of £8880 a year for a 40% taxpayer or £13,320 a year at 60% tax or £1110 a month.
Both figures mark a massive increase over the current fixed annual BIK charge of £3960, which is applied to all light-commercial vehicles.
For existing double or extended cab pick-ups, if the vehicle is purchased, leased or ordered before the implementation date, then the current rules will apply until the disposal, lease expiry or 5 April 2029 – whichever comes sooner.
The announcement from the Government comes after the previous Conservative Government announced a similar rule-change in February 2024, which it then reversed after it faced a significant backlash from the fleet sector due to the increase in costs for drivers, as well as the impact on the pick-up truck market.
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