Following a Court of Appeal judgement, the government will treat Double Cab Pickup Vehicles (DCPUs) with a payload of one tonne or more as cars for certain tax purposes.
From April 2025, they will be treated as cars for the purposes of capital allowances, benefits in kind and some deductions against business profits.
The existing capital allowances treatment should continue to apply to purchases made before April 2025 and transitional Benefit in Kind arrangements are expected to apply to employers who have purchased, leased or ordered a DCPU before 6 April 2025.
These measures are significant for smaller businesses because in recent years HMRC has accepted that DCPUs with a payload of one tonne or more can be treated “as vans” for tax purposes.
They therefore have received favourable tax treatment compared to cars in the past.
Yesterday’s announcement suggests that the favourable tax treatment of DCPUs will be brought to an end next year.
Unfortunately, small businesses within the building and farming sectors are among those most likely to be affected.
As such, you may need to review your strategy for company vehicles and consider what action may be appropriate in light of these new proposals.
