The tax changes coming to pick-ups and what it could mean for retail
From the 6th April 2025, we will see a change to the categorisation of double cab pick-up trucks from commercial vehicles to passenger vehicles. This will apply to double-cab pickups that can carry more than a one-tonne payload and will now mean that such vehicles will lose the tax benefits of commercial vehicles i.e. benefit-in-kind (BiK) tax rates.
Since they are already classed as commercial vehicles, single or extended-cab pick-up trucks are not impacted by this change.
What does this change mean?
The Ford Ranger is currently the most popular pick-up truck on Auto Trader
The change will mean that BiK for double cab pick-up trucks will be calculated in the same way as for company cars. This calculation uses a sliding scale based on the vehicle’s emissions with the payable BiK value based on the value of the vehicle.
Before this, the BiK for double cab pick-up trucks was fixed at £3,960 regardless of emissions or price. This change means that many pickup users could see their costs rise in the next financial year.
For an example of how this could look for owners, lest look at the most popular pick-up truck on Auto Trader, the Ford Ranger. From April 2025 a £50k double cab Ford Ranger would fall into the 37 per cent BIK rate, the highest rate due to emissions, meaning you’d need to pay £3,550 in tax if you were a 20 per cent taxpayer. For people in the 40 per cent tax bracket, however, the new tax payment would rise to over £7,000.
Crucially, vehicles bought before the 6th April will be exempt from this change until they are disposed of, the lease expires, or April 5, 2029.
What activity are we seeing?
We have seen a slight uplift in advert views for pick-up trucks on our platform, with views up 2.9% in January vs last year. Manufacturers are also actively encouraging buyers to order their pick-ups prior to the 6th, since orders placed before this time will still adhere to the existing framework. Whilst difficult to predict, we can anticipate that those commercial buyers looking to avoid this tax will be purchasing before the 6th April, and that we could potential pick-up buyers switch to other commercial vehicles i.e. vans that retain the flat rate BiK tax rate.