WHAT HMRC’S RECENT CHANGE IN BIK LEGISLATION MEANS FOR YOUR DOUBLE CAB & EXTENDED CAB PICK-UP TRUCKS

In the Autumn Budget 2024, released on 30 October 2024, HMRC introduced a change in the legislature regarding the tax treatment of double cab pick-ups. Recently updated on February 20th, 2025 to include Extended Cabs variants, Vehicles purchased from April 2025 will be classified as company cars for benefit in kind, capital allowances, and some deductions from business pros and subject to increased tax rates. Isuzu UK assures you continual support and pledges to closely monitor the evolving situation, ensuring you receive the necessary assistance amid the regulatory changes. Consequently, this blog aims to help you navigate the key details of the new legislation and clarify frequently asked questions regarding the changes and how they may affect your Double cab/Extended cab pick-up. Don’t miss out on the opportunity to secure your Isuzu D-Max at current rates before the changes take effect. With the new tax regulations set to impact double cab/extended pick-ups from April 2025, there’s never been a better time to experience the unmatched capability, durability, and safety of the Isuzu D-Max. Book your test drive today and place your order now to lock in your purchase ahead of the price hike—act fast to avoid the increased costs!

What are the new changes and how does this affect Double cab & Extended cab pick-ups?

Benefit in Kind (BIK) HMRC has updated its legislation regarding the classification of double cab/extended cab pick-ups, with regards to BIK, to be considered as cars as opposed to commercial vehicles from 6 April 2025. Double cab/extended cab pick-ups will be moving away from the previously set at rate of £3,960 and instead will be subjected to the car BIK rate, which can vary between 2% and 37% based on the vehicle’s CO From 6 April 2025, electric double cab/extended cab pick-ups with over 1-tonne payload will be subject to company car BIK rates (3%), increasing by 1% annually until 2028. Capital Allowances (CA) Capital allowances allow businesses to deduct some or all the value of the items (such as vehicles) from the profits before tax. From 1 April 2025, double cab/extended cab pick-ups will also be classed as company cars with regards to CA. Double cab/extended cab pick-ups will be moving away from the previous classification as ‘plant and machinery’ for CA purposes and instead will be subjected to the company car rates, which can vary between 6%, 18% and 100%, based on the vehicle’s CO2.

Will there be a transitional period before the cut off date?

If you are a current owner or looking to purchase, lease, or order a double cab/extended cab pick-up before 6 April 2025, HMRC has instated a transitional period before the cut-off date, whereby you will have the existing treatment until the earlier of disposal, lease expiry, or 5 April 2029. This mitigation will ensure that all double cab/extended cab pickups already owned or purchased before 6 April 2025 will not be subject to the BIK changes and will be classified as commercial vehicles. Each case will be judged on an individual basis on whether the vehicle will be treated as purchased, leased, or ordered before 6 April 2025. You can demonstrate this by providing a contract, deposit documentation, written statement or email from the dealership/supplier confirming that an order has been placed.

Why have these changes been made?

It has been concluded, from the Court of Appeal in Payne & Ors, that double cab pick-ups are equally suited to convey both passengers and goods, therefore not demonstrating a predominant suitability. As a result, dual purpose double cab/extended cab pick-ups will be considered as company cars for purposes of capital allowances, benefits in kind, and some deductions from business profits.

Will Single cab / Extended cab pick-ups be affected by this?

No, Single Cabs are NOT affected, but Extended Cab pick-ups WILL BE affected by the changes as HMRC ruled that they demonstrate clear suitability for commercial use. What happens if you purchase a Double/Extended cab after the transitional period? For end customers, utilising double cab/extended cab pick-ups as company cars, the new legislature will incur the new tax treatment for vehicles purchased, leased, or ordered from 6 April 2025.

Will the changes affect Double cab/Extended Cab pick-ups from being VAT reclaimable?

VAT treatment of Double cab/Extended cab pick-ups remains unaffected. All pick-ups with payloads over 1 tonne qualify for VAT reclaims if the business which purchases the vehicle is VAT registered. The changes only impact capital allowances, benefits in kind, and some deductions from business profits.
Isuzu UK’s commitment to supporting its customers is of utmost importance and Isuzu will continue to monitor developments closely and collaborate with industry stakeholders to help you navigate these changes effectively. Please stay informed of the upcoming changes by visiting the HMRC page regarding the legislative changes https://www.gov.uk/hmrc-internal-manuals/employment-income-manual/eim23150 .

*(Information for guidance purposes only and subject to change) For more information we recommend you speak with your financial advisor or accountant, as we cannot provide you financial advice.

RVT Commercial Vehicles have selected Double Cabs in stock and are also available to order, contact us on 01743 289200 to find out more.