Changes to BIK Tax for Double Cab Pickups from July 2024

Double Cab Pickups to Face Higher Taxation as Commercial Vehicle Status Ends in July 2024

14 February 2024 - Attention all prospective and current owners of double cab pickups! AnyColourCar brings you an essential update on a significant shift in tax classification that could affect your decision on acquiring a double cab pickup as a company vehicle. Before 1 July 2024, consider your options carefully to avoid the forthcoming increase in tax liabilities.

A Turning Point for Double Cab Pickups

Starting from 1 July 2024, the tax landscape for double cab pickups will undergo a major transformation. Historically favoured for their dual functionality, these vehicles will no longer enjoy the beneficial commercial vehicle tax status. Instead, they will be classified and taxed as private cars, a move set to substantially increase the tax burden for company car drivers.

What Triggers the Change?

The heart of this change lies in the Benefit in Kind (BIK) taxation. The new policy dictates that double cab pickups will now be taxed based on their exhaust emissions, similar to private cars. This pivot from the commercial vehicle rate marks a significant shift, given these vehicles' larger engines and consequently higher emission levels.

The rationale behind this decision stems from HMRC's assessment of the 'predominant suitability' of double cab pickups. With their capacity to transport both passengers and goods, these vehicles no longer fit squarely into the commercial vehicle category. This reclassification aims to close a tax loophole that previously made double cab pickups an attractive option for company car users, balancing the field with other vehicle types.

Impact and Insights

The reclassification means that, from July onwards, the BIK rate for double cab pickups will reflect their environmental impact more accurately. This adjustment aligns with broader efforts to incentivise cleaner, more efficient vehicle use among company car drivers.

For those currently owning or considering a double cab pickup, it's crucial to note that any vehicles purchased, leased, or ordered before 1 July 2024 will retain their commercial vehicle classification until 5 April 2028 or the lease's expiration, whichever comes first. This window provides a short-term reprieve but underscores the need for strategic planning ahead of the change.

Industry Response

Mike Hawes, Chief Executive of the Society of Motor Manufacturers and Traders (SMMT), voiced concerns over the implications of this tax reclassification. Highlighting the indispensable role of double-cab pickups in various sectors, particularly in rural and construction contexts, Hawes predicts the policy will escalate costs and potentially deter their use. This shift threatens not only the market dynamics but also the pace of decarbonisation, as businesses may opt to extend the life of older, less eco-friendly vehicles.

Navigating the Changes

As the July 2024 deadline approaches, AnyColourCar remains committed to guiding our customers through these changes. Whether you're weighing the benefits of a double cab pickup or exploring alternative vehicle options, our team is here to provide expert advice and support. Together, we can navigate this transition, ensuring you make informed decisions that align with your business needs and sustainability goals.

Stay tuned to AnyColourCar for further updates and insights into the evolving automotive landscape.