Changes to Benefit in Kind – 6th April 2025

HMRC have announced a change in benefit in kind for double cab pickups from 6th April 2025 onwards.

They will no longer interpret the legislation that defines car and van for tax purposes in line with the definitions used for VAT purposes, which differentiated based on payloads. Anything under one tonne was classed as a car and anything one tonne and over was classed as a van, a resolution introduced as a “pragmatic way of resolving the primary suitability and classification of double cab pickups”.

However this legislation was widely debated and many found the tax treatment of whether a vehicle is a van or a company car confusing, with the most notable instances involving Coca-Cola. In this case HMRC won the appeal that Coca-Cola’s Vauxhall Vivaro and VW Transporter T5 Kombis were cars and not vans.

From 6th April 2025 double cab pickups will now be assessed as a whole vehicle at the point that it is made available to determine whether the vehicle construction has a primary suitability as per the two part test that is outlined in EIM23115:

• First, identify the construction of the vehicle in the relevant tax year.
• Then, consider whether that construction is primarily suited for the conveyance of goods or burden of any description.

HMRC advises that almost all double cab pickups will be classified as company cars, meaning that they will be subject to benefit in kind tax and employees will have to pay more in tax if they drive them. Owners will have until their lease on their current vehicle expires, the vehicle is sold, or 5^th April 2029 to continue to pay the existing BIK rates.

HMRC have provided the following examples to help you to understand the changes coming into play and how it will affect various situations:

• Example 1 – Employer A purchased a double cab pickup on 14 September 2025. As purchases on or after 6 April 2025 would be subject to the new rules, in this example the vehicle would be classified as a car and a car benefit charge would arise.
• Example 2 – Employer B leased a double cab pickup on 10 December 2024. As this was leased before 6 April 2025, the previous rules continue to apply for Employer B until the earlier of the lease expiry, or 5 April 2029.
• Example 3 – Employer C purchased a double cab pickup on 10 January 2024. This was subsequently traded in on 10 April 2025 for another double cab pickup. The previous rules apply to the first vehicle for Employer C until the trade in point on 10 April 2025. As the new double cab pickup was purchased after 6 April 2025 it will represent a car under the new rules and a car benefit charge would arise.
• Example 4 – Employer D placed an order for a double cab pickup on 5 January 2025, but this was not available to the employer until 2 September 2025. As the agreement was entered into before 6 April 2025, the previous rules continue to apply for Employer D until the earlier of disposal, lease expiry, or 5 April 2029.

Please contact the team at Clark Commercials in Aberdeen with any questions you have regarding your order or to place an order before 6th April 2025.

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