Tax Talk: The Double Cab Pickup – Car or Commercial Vehicle?

At Black & White Accounting, we love a tax debate that’s as practical as it is financially significant. If you run a business and use vehicles for work, you might assume that a Double Cab Pickup (DCP) is a commercial vehicle and should be taxed as one. But HMRC doesn’t always see it that way.

The tax treatment of these vehicles is hugely important for VAT, benefit-in-kind (BIK), and capital allowances. And the wrong classification could cost your business thousands.

So, is a Double Cab Pickup a car or a commercial vehicle? Let’s break it down.

The Issue: Why Does Vehicle Classification Matter?

In tax law, vehicles are classified differently depending on their use:

• Cars are subject to higher tax rates for businesses and individuals. Employees using company cars for personal use face higher BIK tax charges, and VAT on cars is usually non-reclaimable.
• Commercial Vehicles (like vans, trucks, and pickups) qualify for VAT recovery, benefit from lower tax rates, and are more tax-efficient for businesses.

The problem? The Double Cab Pickup sits in a grey area—because it has two rows of seats and can carry passengers like a car, but also has a truck bed for business use.

For years, businesses classified these vehicles as commercial, allowing them to claim VAT back and take advantage of lower tax rates. But then HMRC stepped in.

The Outcome: HMRC’s Surprise Ruling

In 2020, HMRC reclassified certain Double Cab Pickups as cars, specifically targeting models like the VW Amarok and Toyota Hilux. This decision reversed decades of tax treatment and sent shockwaves through businesses that relied on these vehicles.

The key ruling:

• If a DCP has a payload of less than 1 tonne, it is now considered a car for tax purposes.
• If it has a payload over 1 tonne, it remains a commercial vehicle.

For businesses, this means:

If your DCP is now classed as a car:

• VAT cannot be reclaimed.
• Higher benefit-in-kind tax applies to employees.
• Less favorable capital allowances reduce tax relief.

If your DCP remains a commercial vehicle:

• VAT can still be reclaimed.
• Lower benefit-in-kind tax applies.
• Better capital allowances are available for tax savings.

The reclassification hit many businesses hard, leaving them with unexpected tax liabilities and forcing companies to rethink their vehicle choices.

The 2025 Rule Change: The Final Verdict?

HMRC has confirmed that Double Cab Pickups will be taxed as cars from April 2025, following the latest Budget announcement.

This change, outlined in the Budget Red Book, reverses earlier decisions that caused uncertainty over the taxation of these vehicles.

Previously, HMRC had briefly classified Double Cab Pickups as cars in early 2024, only to revert to van status a week later. The reclassification now stems from the 2020 Court of Appeal case, Payne & Ors (Coca-Cola) vs R & C Commrs, which questioned the tax treatment of vehicles with a payload of one tonne or more.

Under the new rules:

• Double Cab Pickups will be treated as cars for corporation tax from 1 April 2025.
• They will also be taxed as cars for income tax from 6 April 2025.

This change will affect capital allowances, benefits in kind, and certain business deductions. However, transitional arrangements will allow employers who purchase, lease, or order these vehicles before the cut-off date to continue benefiting from the previous tax treatment until 2029.

HMRC has indicated that this ruling is aimed at ensuring consistency in tax treatment across similar vehicles.

Why Is This Interesting?

This case highlights just how complicated and ever-changing tax law can be—especially when it comes to business expenses.

A vehicle that was tax-efficient one year might not be the next, meaning businesses must stay on top of HMRC’s rulings to avoid costly surprises.

If you own or lease company vehicles, it’s critical to understand how tax laws impact your bottom line.

Why You Need an Accountant Like Us

At Black & White Accounting, we don’t just look at your numbers—we help you plan strategically to minimise tax and maximise business efficiency.

We help you:

✅ Classify your company vehicles correctly—so you don’t get hit with unexpected VAT or BIK tax bills.
✅ Maximise tax reliefs—by advising on the best way to structure vehicle purchases and leases.
✅ Stay ahead of HMRC rule changes—so you don’t get caught out by shifting tax classifications.

If you use company vehicles for business, you need a tax strategy that works for you, not against you. Let’s chat about how we can help. Get in touch today.