As of April 2025, significant tax changes have been implemented for double and extended cab pick-up trucks in the UK.
These vehicles are now classified as company cars for Benefit-in-Kind (BIK) and Capital Allowance (CA) purposes, following a Court of Appeal ruling that pick-up trucks are not predominantly suitable for transporting goods over passengers.
Consequently, they are no longer treated as commercial vehicles for these tax aspects.
For Vehicle Excise Duty (VED), also known as road tax, the rate remains at the commercial level of £345 per year, ensuring continued affordability for business users.
Additionally, VAT is still fully reclaimable on pick-ups with a payload exceeding one tonne, provided the purchasing business is VAT-registered and makes fully taxable supplies.
Newly registered double and extended cab pick-ups are subject to company car BIK rates, which range from 3% to 37% based on COâ‚‚ emissions.
Zero-emission vehicles with payloads over one tonne start at a 3% rate, which increases by one percentage point annually until 2028.
However, a transitional period is in place for vehicles ordered, purchased, or leased before 6th April 2025, allowing them to retain their previous classification and benefit from the historic flat-rate commercial vehicle BIK treatment until disposal, lease expiry, or 5th April 2029.
Capital Allowance rules have also changed. As of 1st April 2025 for corporation tax and 6th April for income tax, these pick-ups are no longer eligible for treatment as ‘plant and machinery’ and are now taxed in line with company car writing-down allowances, which are based on CO₂ output.
These rates can be 6%, 18%, or 100% for zero-emission vehicles. Expenditure must be incurred before 1st October 2025 to fall under the old regime.
It's still possible to save a bit of money if you opt for a cleaner pick-up truck like the Ford Ranger PHEV or the Maxus eTerron 9.
Industry feedback indicates widespread misunderstanding about these legislative changes, with over 71% of pick-up buyers, 68% of accountants, and 59% of dealers uncertain about the impact on VED and VAT.
Read: What tax do I have to pay on a pick-up?
This has led to frequent concerns, especially among professionals in agriculture, construction, and other commercial sectors.
Single cab pick-ups remain unaffected by these changes and continue to be treated as commercial vehicles in all respects.
| Category | Before April 2025 | After April 2025 | How it effects you |
|---|---|---|---|
| Benefit-in-Kind (BIK) | Flat rate: £4,020 (2025/26) as a commercial vehicle | Taxed as company car (CO₂-based, from 3%–37%) | Increased company car tax liability for business users |
| Capital Allowances (CA) | Treated as ‘plant and machinery’ for 100% or 18% relief | Reclassified as company cars; allowances based on CO₂ | Reduced tax efficiency for business asset write-offs |
| Vehicle Excise Duty (VED) | £345 per year for a commercial vehicle | No change. Still £345 per year | Still a cost-effective annual road tax |
| VAT Reclaim | Fully reclaimable if the payload is over 1 tonne & VAT registered making fully taxable supplies | No change. Still fully reclaimable if criteria are met | Maintains key benefits for VAT-registered businesses |
| Transitional Relief | Not applicable | Applies if the vehicle was ordered, leased or purchased before April 2025 | Buyers retain old BIK/CA rules until April 2029, lease end, or vehicle disposal, whichever comes first |
| Single Cab Pick-Ups | Commercial vehicle status | No change. Remains a commercial vehicle | Remain unaffected by BIK and CA changes |
