Motorists and businesses are being warned that a common loophole will not protect them from incoming car tax changes launching in a matter of weeks.
From April 1, 2025, for Corporation Tax, and April 6 for income tax, double cab pick-up trucks will be treated as cars for the purposes of capital allowances, Benefit-in-Kind, and some deductions from business profits.
This was outlined in the Autumn Budget and comes after a Court of Appeal judgement which will see double cab pick-up trucks with a payload of one tonne or more not as commercial vehicles.
This could see some motorists and businesses pay far greater sums of money as the most polluting petrol and diesel cars pay a Benefit-in-Kind rate of around 37 per cent.
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Drivers could be caught out with car tax changes launching in April
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Company cars which produce more than 170g of CO2 per kilometre will pay a BiK rate of 37 per cent until 2027/28, when it rises by one per cent in 2028/29 and again in 2029/30.
Additional costs could be worth thousands of pounds, devastating drivers and hiking their tax bills by thousands of pounds.
The Treasury has confirmed that transitional BiK arrangements will apply for employers that have purchased, leased or ordered a double cap pick-up truck before April 6.
This is irrespective of when it is delivered. Any vehicle ordered after April 6 will be treated as a company car for BiK and capital allowance purposes.
Experts have also clarified that drivers and businesses could be caught out when transferring vehicles between employees.
Tax specialist Harvey Perkins, co-founder of HRUX, said: "If you order the vehicle on or after April 6, it's a car. If you order it before April 6, it's a van.
"There's no deadline for delivery of the vehicle. If you change the user of that double cab pick-up, it immediately becomes a car.
"If you order a double cab pickup before April 6 and put Fred in it, and then in a year's time Fred leaves, and then you put Susan in it, for Susan, it's a car immediately."
The Treasury also unveiled a number of other Vehicle Excise Duty (VED) changes during the Autumn Statement during Rachel Reeves's first address as Chancellor.
The Government said it was strengthening incentives to purchase EVs by widening the differentials in VED first year rates between EVs and hybrids or petrol and diesel cars.
This will see zero emission vehicles pay just £10 in first year taxes, while the most polluting petrol and diesel vehicles could face costs rising from £2,745 to £5,490.
From April 1, 2025, car tax rates for cars, vans and motorcycles, excluding first year rates for cars, will be uprated in line with inflation.
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Some pick-up truck owners will be hit with huge costs from April 1
PAElectric vehicles will also have to start paying car tax from April 1, after former Conservative Chancellor Jeremy Hunt unveiled the measures in the 2022 Autumn Statement.
Experts have called on drivers to make a decision on their next vehicle ahead of the April deadline to potentially save hundreds of pounds in car tax.
