Understanding the New Tax Treatment for Double Cab Pickups (DCPUs) from April 2025

What is a Double Cab Pickup? 

A double cab pickup (DCPU) normally has:

• a front passenger cab, with two rows of seats for the driver and around four passengers
• four doors capable of being opened independently
• an uncovered pickup area behind the passenger cab

They are very commonly owned as business vehicles, particularly in the agricultural sector. Tax regulations currently treat DCPUs with a payload of:

• under 1 tonne as cars

• 1 tonne or more as vans

This will change for corporation tax and income tax purposes from April 2025.  Please see below.

What is the difference between vans and cars for tax purposes?

Vans have a more favourable tax treatment than cars because

• The full cost of vans can usually be deducted for tax purposes in the year of purchase via the annual investment allowance or full expensing

• Cars, unless they are electric vehicles, do not qualify for the  annual investment allowance or full expensing and obtaining tax relief therefore takes much longer and can take years

• Vans have lower benefit in kind (BIK) charges than cars

• VAT is not recoverable on business cars where there is any element of private use.

What are the key changes and effective dates?

From 1 April 2025 for corporation tax and 6 April 2025 for income tax DCPUs will be treated as cars for the purposes of capital allowances and BIKs.

However, there are some fairly generous transitional rules for DCPUs with a payload of 1 tonne or more, as follows:

• The existing capital allowances treatment will continue to apply to all vehicles purchased before the change.  They will continue to be treated as vans.

• Where expenditure on the DCPU has been incurred as a result of a contract entered into before 1 April 2025 for Corporation Tax and 6 April 2025 for Income Tax and the expenditure is incurred on or after that date but before 1 October 2025, a DCPU with a payload of 1 tonne or more will continue to be treated as a van.

The full cost of the vehicle will therefore usually be allowable for tax purposes in the year of purchase via the annual investment allowance or full expensing

• Transitional BIK arrangements will apply where employers have purchased, leased, or ordered the vehicle before 6 April 2025.

For BIK purposes the DCPU will therefore be treated as a van until the earlier of disposal, the lease expiry or 5 April 2029.

Has the VAT treatment of DCPUs changed?

The VAT treatment is unaffected and will continue to be based on payload:

• Any DCPU under 1 tonne is classified as a car

• Any DCPU of 1 tonne and over is classified as a van. 

If your business uses DCPUs with a payload of 1 tonne or more, you should talk to us about how this change in tax treatment will affect you.

It may be sensible to bring forward plans to replace such vehicles in order to take advantage of the transitional rules, but time is short to make such decisions.

Photo by Cassiano K. Wehr on Unsplash

The information in this blog provides only an overview of HMRC guidance and legislation in force at the date of publication and no action should be taken without consulting the detailed HMRC guidance and legislation or seeking professional advice.  Therefore no responsibility for loss occasioned by any person acting or refraining from action as a result of the material contained in this blog can be accepted by the firm.