Benefit-in-kind changes reclassify double cabs as cars not vans from July 2024

The benefit in kind treatment of double cab pick up trucks will change significantly from 01 July 2024.

HMRC has decided that it will no longer follow the VAT treatment of double cabs whereby pickups below 1 tonne were classified as a car, and double cab pick ups above 1 tonne as a van.

In most cases double cabs will now be treated as a car for taxation purposes.

It means that drivers in a double cab who have traditionally benefited from a flat rate van tax of £792 a year (20%) or £1,584 (40%) will face a significant uplift in tax since most double cabs have high CO2 emissions which will place them in the 37% tax bracket.

If those drivers have also taken free fuel based on the van rate, they will now face the much higher car fuel benefit.

The tax treatment has led to the growing number of double cabs with significantly upmarket interiors and specifications; the newly announced tax treatment will, in all likelihood, see this trend fade.

Transitional arrangements

For current drivers of double cabs and businesses which lease them, the changes will not be immediate. Transitional arrangements will apply until 05 April 2028.

HMRC has provided some useful transitional case scenarios in its guidance which you can access at https://www.gov.uk/hmrc-internal-manuals/employment-income-manual/eim23151.