Double cab pickups: Major tax changes coming in April 2025
If your business relies on double cab pickups (DCPUs), it’s time to plan ahead. From April 2025, significant changes in tax treatment could impact your finances, affecting capital allowances, lease disallowance, and employment benefits. These updates mean that most DCPUs will be treated as cars, not vans, for tax purposes—a shift that could reduce capital allowances and increase benefits-in-kind (BIK) charges for employees. Please note that these can only affect new vehicle purchase or lease agreements entered into from April 2025 onwards – existing vehicles will be subject to transitional rules.
Here’s what you need to know and the steps you should take to prepare.
What are the key changes?
Under the new guidance, the following changes will apply to DCPUs:
- Capital Allowances – DCPUs will no longer qualify for the Annual Investment Allowance (AIA) typically available for vans and plant equipment. Instead, they will follow car rules, significantly limiting the upfront tax relief available to businesses purchasing these vehicles.
- Lease Disallowance – Leasing a DCPU will now include a flat-rate restriction in the amount of lease costs that can be deducted as an expense, similar to cars
- Employment Benefit-in-Kind (BIK) – Employees using DCPUs will see higher BIK charges, as cars generally attract higher rates than vans. This could make these vehicles less attractive for employees who previously benefited from lower BIK rates on DCPUs.
Who is affected?
These changes impact UK-based business owners across a range of industries:
- Construction & Trade businesses – often reliant on DCPUs for work and transporting goods.
- Farming & Agricultural enterprises – frequently use DCPUs for mixed business and personal purposes.
- SMEs with employee vehicle schemes – providing DCPUs to employees will now carry higher costs.
How will this affect business decisions?
- Fleet Management – Businesses may need to reassess their fleet strategy, considering alternatives to DCPUs that could offer better tax efficiency under the new rules.
- Employee Costs – Employers will need to consider whether higher BIK rates make DCPUs less attractive for employee use and explore alternative options, such as pool vehicles or electric cars with lower tax rates.
- Financial Planning – Businesses planning significant capital expenditures on DCPUs in the next two years should evaluate whether purchasing or leasing other vehicle types could provide better tax benefits in the long term.
What should you do now?
- Review your current fleet – Identify any DCPUs in your fleet and calculate their current and future tax costs under the new rules.
- Reconsider future purchases – Before committing to purchasing or leasing a DCPU, consider whether an alternative vehicle type would align better with your business’s tax strategy.
- Consult your accountant or tax advisor – These changes are complex and may vary depending on your specific business setup. Seeking professional advice will help you navigate the tax implications and explore your options.
If you’re preparing for the April 2025 tax changes to double cab pickups (DCPUs) BAS Associates Ltd has you covered. Our expert team will guide you through the new regulations, ensuring your business minimises tax impact and maximises financial efficiency.
Don’t wait – get ahead of the changes now. Book your free consultation today to review your fleet strategy and explore tax-saving opportunities tailored to your business.
📞 Call us at 01296 681341 or 📧 Email us at info@basassociates.co.uk
