2025 Pick-Up Truck Tax Changes: How HMRC’s New Rules Affect You

From April 2025, HMRC will reclassify double cab and extended-cab pick-up trucks as cars for tax purposes rather than commercial vehicles. This means higher Benefit-in-Kind (BIK) tax, reduced capital allowances, and increased costs for businesses and individuals who own or lease these vehicles.

If you use a pick-up truck for work, here’s what you need to know.

Pick-up trucks come in different configurations, with the most common being:

• Single Cab – A two-door pick-up with a single row of seats and a larger load bed.
• Extended-Cab (King Cab or Super Cab) – A second row of smaller, occasional-use seats, often with small rear doors.
• Double Cab (Crew Cab) – A four-door pick-up with a full second row of seats, offering more passenger space but a shorter load bed.

The tax changes apply to double cab and extended-cab pick-ups but do not affect single cab models, which will remain classified as commercial vehicles. If you use a pick-up with more than two seats for business and personal use, the new tax rules will impact you. 

For more details see GOV.UK

Pick-Up Trucks That Will Remain Commercial Vehicles

For businesses and individuals looking to avoid the tax increase, single cab pick-up trucks will still qualify as commercial vehicles. Some of the popular single cab pick-ups that will remain compliant include:

• Toyota Hilux Single Cab
• Ford Ranger Single Cab
• Isuzu D-Max Utility Single Cab
• And more 

These models offer commercial usability without the added tax burden of reclassification.

Pick-Up Trucks That Will Be Reclassified as Cars

The following popular double cab and extended-cab pick-ups will be affected by the new tax rules:

• Ford Ranger Double Cab Wildtrak & Raptor
• Toyota Hilux Double Cab
• Isuzu D-Max Double Cab
• Volkswagen Amarok Double Cab
• And more 

These models will be taxed as cars from April 2025, leading to significantly higher BIK charges and lower capital allowances for businesses.

Currently, double cab and extended-cab pick-ups are treated as commercial vehicles for tax purposes, meaning they benefit from lower BIK rates and full capital allowances.

From 6 April 2025, HMRC will treat them as cars instead.

This change follows a recent legal ruling which determined that pick-ups with additional seating are more like cars than commercial vans. As a result, their tax treatment will now align with standard company cars.

• Current Situation: Pick-ups are taxed at a fixed rate, making them an attractive option for employees who use them for both work and personal use.
• From April 2025: BIK tax will be based on CO₂ emissions and the vehicle’s list price, which could lead to a significant increase in tax liability.

Example:

A Ford Ranger Wildtrak currently attracts a fixed-rate BIK charge, leading to a monthly tax bill of around £66 for a 20% taxpayer. Under the new rules, this same vehicle (with CO₂ emissions over 200g/km) would fall into the 37% BIK bracket. This means a monthly tax bill of £300 for the same 20% taxpayer.

Businesses currently enjoy full capital allowances on pick-up trucks, allowing them to deduct the full cost from taxable profits.

From April 2025, capital allowances will drop to 18% per year, the standard rate for cars. This will slow down tax relief on new vehicle purchases and impact cash flow for businesses relying on upfront deductions.

For more information see Capital Allowances GOV.UK.

Yes. If you purchase or lease a pick-up before 6 April 2025, the current tax rules will continue to apply until: 

• You sell or dispose of the vehicle
• The lease agreement expires
• 5th April 2029 ( whichever comes first)

This means if you act before the deadline, you can continue benefiting from the current tax advantages for up to four years.

• Higher tax bills: Employees using pick-ups as company vehicles will face larger deductions from their salary.
• Cash flow impact: Businesses may struggle with reduced capital allowances.
• Potential fleet changes: Companies may need to reconsider whether pick-ups remain viable or if alternative vehicles offer better tax efficiency.

1. Assess Your Fleet: Review your current and planned vehicle acquisitions. If you rely on pick-ups for business, you may need to rethink your options.
2. Consider Buying or Leasing Before April 2025: If a pick-up is in your future plans, acting now means you can still benefit from the existing tax rules until 2029. If you’re considering a tax-efficient pick-up lease, check out our latest pick-up leasing deals.
3. Seek Professional Tax Advice: The new rules are complex, and a tax advisor can help you understand how they’ll impact your finances. They can also explore other tax-efficient options for vehicle procurement.

The 2025 reclassification of double cab and extended-cab pick-ups is a major shift that will increase tax liabilities for businesses and individuals. If you currently own or lease one, or plan to, you need to act before April 2025 to minimise costs and make the most of transitional arrangements.

For more details, visit the official HMRC guidance GOV.UK.

Why not check out our Pickup Trucks: Advantages and Disadvantages Blog for more information? We also produce a range of weekly blogs on various topics, which can be found in the blog section of our website.

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