UK (Parliament Politics Magazine) – Following Chancellor Rachel Reeves’ tax changes, double cab pick-ups are now treated as company cars, leaving some drivers with increasing £8,000 yearly costs.
As reported by GB News, Rachel Reeves‘ new tax rules on double cab pick-ups could leave drivers significantly worse off, enforced from the start of this month.
What do the new tax rules mean for double-cab pick-ups?
From April 6, the Ford Ranger, Isuzu D-Max, and Toyota Hilux will now fall under the Benefit-in-Kind tax regulations for company cars, as per the new rules, instead of being treated as vans.
In response to a 2020 ruling by the Court of Appeal in the Payne vs Ors case, it was established that double cab pick-ups were not definitively more appropriate for either business or personal use.
Following this, HMRC adjusted its policies to align with the ruling, moving away from the previous one-tonne payload system.
Before April 2025, double cab pick-up trucks with a payload of 1,000kg or more, used for personal purposes, were taxed at a flat-rate BIK goods van rate of £3,960.
As a result, £3,960 was added to the driver’s taxable income, and taxed according to the 20% basic or 40% higher rate, based on overall income.
The updated rules now apply company car BIK rates to double cab pick-up trucks, with the rates based on the vehicle’s carbon dioxide emissions, ranging from 2% to 37%.
Many diesel-powered double cab pick-up trucks, commonly chosen for their ability to haul heavy loads, typically fall under the 37% CO2 emissions band due to their high torque.
Under the new system, the tax calculation incorporates the vehicle’s P11D value, which is the drive-away cost minus the first registration fee and the first year’s Vehicle Excise Duty, but includes VAT.
Truck owners are facing a major shift in the fuel benefit system. Previously, dual-use vehicles were taxed under the company van BIK rate of £757. However, the new rules now place them under the car fuel benefit multiplier, which is set at £28,200 for the 2025-2026 period.
What did Tax Firm Finsbury Robinson say about new double cab tax changes?
Experts have raised concerns that the updated regulations could impose significant burdens on business owners, with certain drivers facing annual tax hikes of £8,000 or more.
Tax firm Finsbury Robinson stated,
“The changes to the tax treatment are significant, and many business owners will be considerably worse off as a result of them. However, some choices can be made to minimise tax liabilities.”
It explained that the system was intended for HMRC to collect tax revenue on benefits gained through work that holds a financial value.
What did Rachel Reeves say after meeting with Scott Bessent?
Rachel Reeves and US Treasury Secretary Scott Bessent discussed a “prosperity deal” during a meeting on Friday, with her team describing the meeting as “upbeat and positive.”
After meeting with Mr Bessent she said,
“Today I met with Scott Bessent to discuss the UK-US economic prosperity deal and our goal of reaching an agreement that is in both our national interests.”
Before the meeting, the Chancellor suggested that Britain’s trade links with the EU could be ‘arguably even more important’ than its ties with the US.
She stated,
“I understand why there’s so much focus on our trading relationship with the US but actually our trading relationship with Europe is arguably even more important, because they’re our nearest neighbours and trading partners.”
Ms Reeves added,
“I’ve also this week met the French, the Germans, the Spanish, the Polish, the Swedish [and] the Finnish finance ministers – because it is so important that we rebuild those trading relationships with our nearest neighbours in Europe, and we’re going to do that in a way that is good for British jobs and British consumers.”