Motorists could face thousands of pounds in extra tax costs within weeks as manufacturers warn drivers to make a decision on their vehicle-buying intentions.
Chancellor Rachel Reeves unveiled a raft of tax changes in the Autumn Statement last October, including expensive first year rates for new vehicles and Benefit-in-Kind rules.
One of the key changes included new rules for double cab pick-up vehicles with a payload of one tonne or more, which will now be treated as cars.
This will apply from April 1, 2025, for Corporation Tax, and from April 6, for income tax, capital allowances, BiK and some deductions from business profits.
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Major new car tax changes will be introduced at the start of April
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The decision was made to change the treatment of double cab pick-up vehicles following a Court of Appeal judgement, which ruled that where "no clear predominant suitability for carrying goods can be identified, the default should be that they are cars".
HMRC has now outlined that it will no longer align its interpretation of the terms "car" and "van" for tax purposes with the definitions used for VAT purposes.
From April 6, 2025, classification of double cab pick-ups will need to be determined by "assessing the vehicle as a whole at the point that it is made available to determine whether the vehicle construction has a primary suitability".
Many have warned that drivers and businesses will see their Benefit-in-Kind tax payments go up dramatically since they will be taxed alongside some of the most polluting petrol and diesel cars, which generally attract a rate of more than 35 per cent.
Double cab pick-up trucks will be reclassified as cars under the new tax rulesPAThe British Vehicle Rental and Leasing Association has called on drivers to make themselves aware of the changes which could see their taxes increase.
Similarly, some car brands are calling on businesses to ensure they are prepared for any changes before the new financial year in April 2025.
Alan Able, managing director of Isuzu UK, said: "We appreciate HMRC's latest clarification, which provides businesses with a more definitive understanding of how both double cab and extended cab pick-ups will be classified for Benefit-in-Kind and capital allowance purposes from April 2025.
"This additional guidance is essential for fleets, businesses and individual buyers as they navigate these significant changes."
Isuzu has gone one step further and launched a new campaign to raise awareness of the changes, which calls on drivers to secure a new double cab pick-up truck before April 2025.
Any double cab pick-up truck that is purchased or ordered before April 6 for BiK purposes or April 1 for capital allowance purposes will retain their commercial vehicle classification until the earlier of disposal, lease expiry, or April 5, 2029.
It highlights that extended cab pick-ups are affected, although single cabs are unaffected because they demonstrate clear suitability for commercial use.
Double cab pick-up trucks purchased after April 2026 will be subject to the new tax treatment, which could see drivers and businesses slapped with enormous fees that they may not have foreseen.
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Isuzu has urged motorists to make a decision on their next vehicle ahead of the looming April deadline
ISUZUAble added: "The BiK campaign reflects our commitment to keeping our customers informed and empowered. We recognise that HMRC's decision represents a fundamental shift in how double cab pick-ups are taxed.
"With this campaign, we aim to ensure our customers understand the implications and encourage them to act now to avoid higher costs later."
