Treasury confirms VED status for crew cab pickups

Fleets operating crew cab pickups avoid a double whammy when the tax status of their vehicles changes.

Double cab pickups will be treated as company vehicles for Benefits in Kind (BIK) and Capital Benefits tax purposes from April 2025.

The existing capital surcharge regime will apply to those purchasing double cab pickups before April 2025.

The BIK transition measures will apply to employers who purchased, leased or ordered a crew cab pickup truck before April 6, 2025.

They will be able to use the previous regime until disposal, lease expiration or 5 April 2029, whichever comes first.

However, the Treasury has reassured fleets that the change announced in the Autumn Budget will not affect the level of Vehicle Excise Duty (VED) they must pay.

The government says it is “harmonizing” the regime for double cab pickup trucks (DCPUs) to reflect a Court of Appeal decision involving HMRC and Coca-Cola regarding the vehicle’s primary suitability.

A Treasury spokesperson explained: “The Government has announced that HMRC will change its advice on the tax treatment of DCPUs in line with case law, reflecting the Court of Appeal’s decision that multi-purpose vehicles that are equally suitable for the transport of people and goods should be treated as motor vehicles. . .

“It is right that their tax takes into account the purpose for which they are primarily intended.”

HMRC successfully argued in the Appeal Chamber that Coca-Cola’s Vauxhall Vivaro and VW Transporter T5 Kombis (1st and 2nd generation) were cars in 2020 and not vans.

The previous government decided to try to tighten tax rules to reflect a decision made in February, before making a dramatic U-turn just seven days after the policy was announced.

“The government will apply the decision to treat them as cars, as failure to do so will mean significant tax breaks of hundreds of millions a year for these typically higher-emitting vehicles,” the spokesman said.

However, the Ministry of Finance reported Fleet News that crew cab pickups will continue to be classified as light commercial vehicles (LDVs) for VED purposes under the VED legislation definitions, which are “unaffected” by this ruling.

VED rates vary depending on the type of vehicle, with different rates applying to cars, vans and motorcycles, which are then calculated based on a number of factors.

Double cab pickups are subject to the LGV VED rate, which is currently £335 per year and rises to £345 under the Retail Price Index (RPI) for 2025/26.

Double cab pick-ups classified as motor vehicles would attract an annual VED rate of several thousand pounds more.