Double Cab Pickups Will Be Classed as a Company Car from July 2024

(Posted on 14/02/24)

From July the 1^st 2024 HMRC will now longer class double cab pickups as vans but as company cars instead, which is going to result in it becoming increasingly more expensive to drive a pickup.

Currently a pickup weighing over 1 ton is classed as a van and anything under is classed as a car. It is predicted that most double cab pickups will be classed as a car as their dual suitability for transporting passengers and goods, lacking a predominant purpose. This will have major financial implications with this change of policy as the reclassification will result in higher income tax and NIC compared to company vans.

With BIK being beneficial for lower emissions commercial cars, pickups are going to take major financial hit from this as majority of pickups emit a high amount of C02 emissions resulting in a high BIK tax rate. Commercial vans currently pay a fixed BIK rate which for lower tax bracket is £792 a year which will significantly increased with the policy change and for Ford Ranger could be looking at paying over four times this a year.

If we look at the most popular pickup in the UK, currently the Ford Ranger which emits 315g/km CO2 emissions which places in the highest BIK tax bracket of 37%. Which means that the BIK an employees will be expected to pay is:

20% Tax Bracket- £3,648 a year or £304 a month

40% tax bracket- £7,296 a year or £608 a month

45% tax bracket- £8,208 a year or £684 a month

VAT reclamation will undergo alteration, with commercial cars only eligible for 50% VAT reclamation compared to the previous 100% reclamation for vans.

A transition period is in place which allows you to order a double cab pick up before July the 1^st 2024, granting exemption from the policy until vehicle lease expiration, disposal of vehicle, or April 5th, 2028. So, if you want a double cab pickup you have until the start of July 2024 to order or purchase one.

However, if you able to prove that “that construction is primarily suited for the conveyance of goods or burden of any description” the pickup will be classed as a van even if purchased after July 2024.

This policy change is expected to fuel a surge in double cab pickup sales leading up to July 2024, however concerns arise on the progress that could be stalled in decarbonisation of fleets. As we could see the reduction in vehicles emissions slow down due to businesses and individuals who need double cab pickups and choose to keep a hold of them for longer periods of times as it would be far more financially advantageous for them. Concerns also lie that this is enough time for industries to adapt to this new policy change.

Presently, the UK market features only one electric pickup, the Maxus T90, with a 220-mile range. However, limitations such as range anxiety and accessibility to charging infrastructure, especially in remote areas, may deter widespread adoption. Hybrid pickup options are currently absent in the UK, with Ford's plug-in hybrid slated for a 2025 release, offering limited alternatives for double cab pickup owners faced with increased costs.

So, finding an alternative may not be on the cards for many and the increased cost may just have to be endured for many.