Leasing a pick-up? Act NOW to beat the price hike

• New pick-up tax rules explained
• Legislation is about to change
• From April 2025, double cab pick-ups reclassified as cars
• Lease now to avoid tax hike

Looking to lease a pick-up? You need to act now to avoid a looming tax deadline.

Let’s start right from the beginning.

Up until now, double cab pick-ups have enjoyed favourable tax treatment. In the eyes of the tax man they’ve been treated as commercial vehicles instead of cars.

Why is that important? For years pick-ups attracted an affordable flat rate in terms of Benefit in Kind (BIK) and Capital Allowances (CA).

However, things are changing.

From April 2025 onwards, double cab pick-ups will be reclassified as cars for tax purposes. The flat rate of tax will shift to emissions-based percentages and you’re going to end up shelling-out more each month.

BUT - you can preserve favourable tax treatment until 2029 if you sort a lease BEFORE April 2025.

As our chums at Isuzu have pointed out this week, customers can ‘act now to avoid higher costs later’. Speaking ahead of the launch of the all-new D-Max, Isuzu has also issued a helpful pick-up tax explainer:

Benefit in Kind (BIK)

From 6th April 2025, double cab pick-ups will be treated as cars for BIK purposes, shifting from the current flat rate of £3,960 to a variable rate based on CO2 emissions.

Capital Allowances (CA)

From 1st April 2025, these vehicles will also be classified as cars for CA purposes, moving away from their prior status as 'plant and machinery.'

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

Yes. Double cab pick-ups purchased or ordered before 6th April 2025 for BIK purposes (and 1st April 2025 for CA purposes) will retain their commercial vehicle classification until the earlier of disposal, lease expiry, or 5th April 2029.

Are single and extended cab pick-ups affected?

No. Single and extended cab pick-ups remain classified as commercial vehicles.

Does this impact VAT reclaim eligibility?

No. VAT treatment for double cab pick-ups remains unchanged.

Does this impact road tax?

No. Vehicle Excise Duty (VED), also known as road tax or car tax, remains unchanged for double cab pick-ups.

What happens if I purchase a double cab pick-up after April 2025?

Vehicles purchased after this date will be subject to the new tax treatment, leading to higher costs for buyers and businesses.

Why act now?

By acting before the deadline, customers can benefit from the existing flat-rate BIK taxation structure, avoiding potentially steep increases, take advantage of current capital allowances for commercial vehicles, which offer more favourable tax deductions, and lock in their purchase under the transitional rules, ensuring they retain the commercial classification until at least April 2029.

Why have these changes been made?

The Court of Appeal concluded that double cab pick-ups serve dual purposes, both passenger and cargo transport, necessitating their reclassification as cars for tax purposes.

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