Despite recent classification changes, Vehicle Excise Duty (VED) for double and extended cab pick-ups remains at the £345 annual rate for commercial vehicles, maintaining affordability for businesses. Meanwhile, VAT is still fully reclaimable on these vehicles with a payload over one tonne, provided the business is VAT-registered.
From 6th April 2025, newly registered double and extended cab pick-ups will be subject to company car Benefit-in-Kind (BIK) rates, ranging from 3% to 37% based on CO₂ emissions. Zero-emission vehicles over one tonne will start at a 3% rate, increasing by one percentage point each year until 2028. However, pick-ups ordered or leased before this date will keep their previous classification until 5th April 2029.
Changes to Capital Allowance (CA) rules took effect on 1st April 2025 for corporation tax and on 6th April for income tax. Double and extended cab pick-ups are no longer classified as ‘plant and machinery’ and will now be taxed based on CO₂ output. Expenditure must occur before 1st October 2025 to qualify under the old rules.
Research from Isuzu UK has shown that over 71% of pick-up buyers and many accountants still lack clarity about the impact of these changes. Alan Able, Managing Director of Isuzu UK, reassured stakeholders that VAT can continue to be reclaimed and VED remains at the commercial rate.
These changes stem from a Court of Appeal ruling reclassifying double and extended cab pick-ups as cars for BIK and deductions from business profits. Single cab pick-ups will still be regarded as commercial vehicles.
Oliver Garner, Head of Tax at Isuzu UK, highlighted the importance of providing clear information to assist customers in navigating the new regulations.
For further guidance, please visit the Isuzu website at: http://www.isuzu.co.uk/bik.
