Should you still purchase a Double Cab Pickup?

Recent changes announced in the October budget have reshaped the tax landscape for Double Cab pickups (DCPUs), making it essential to reconsider their appeal as a business vehicle.

Current Tax Advantages

Double Cab pickups have traditionally been a cost-effective option due to:

Lower Benefit-in-Kind (BIK) charges for personal use, offering employees significant tax savings.

Generous capital allowances for businesses, enabling them to claim up to 100% of the vehicle’s purchase cost in the first year.

Upcoming Tax Changes

However, from 1 April 2025 for Corporation Tax and 6 April 2025 for Income Tax, all DCPUs will be treated as cars for tax purposes. This reclassification will affect:

Benefit-in-Kind (BIK):

Employees using DCPUs for personal mileage will face significantly higher company car tax bills. For instance, a higher-rate taxpayer currently paying around £1,800 annually in BIK could see this rise to over £10,000, depending on the vehicle’s CO₂ emissions and list price.

Capital Allowances:

Businesses will no longer be able to write off the full purchase cost in the year of acquisition. Instead, these vehicles will be subject to lower annual capital allowance rates, potentially as low as 6%, reducing the upfront tax relief significantly.

Key Implications

Employees: Expect substantial increases in personal tax costs for using DCPUs.

Businesses: Reduced ability to benefit from immediate tax deductions, impacting cash flow and investment planning.

The Window of Opportunity

If you purchase or lease a DCPU before April 2025, you can secure the current tax benefits until at least 2029. This includes:

Lower BIK charges for employees.

The ability to write off the full purchase cost in the first year.

The upcoming tax changes will undeniably make DCPUs less attractive from a financial perspective after April 2025. However, businesses and employees who act promptly can lock in the current advantages for several more years. If you’ve been considering purchasing a Double Cab pickup, now is the time to decide, as the clock is ticking on these favourable tax rules.

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