If you are a sole trader or small business owner using a double cab pickup (DCPU) for your work, now is the time to consider your options.
The Budget revealed a tax change for DCPUs that could have significant financial implications for both you and your business.
Whether you are looking to expand your fleet or replace an ageing vehicle, acting now could save you money.
What is a DCPU?
A DCPU is a type of vehicle that features a front passenger cab with a second row of seats for up to four passengers, four independently opening doors, a payload capacity of one tonne or more, and an uncovered pickup area behind the cab.
These vehicles are typically popular among landscapers, builders, and other tradespeople due to their versatility and practicality.
What is changing?
Today, DCPUs benefit from the favourable tax treatment typically applied to commercial vehicles.
This includes lower Benefit-in-Kind (BIK) charges for personal use, making them a cost-effective option for employees.
Additionally, businesses can take advantage of generous capital allowances, which allow them to claim up to 100 per cent of the vehicle’s purchase cost in the first year.
However, from 1 April 2025 for Corporation Tax and 6 April 2025 for Income Tax, all DCPUs will be treated as cars for tax purposes, including capital allowances, BIK, and certain deductions from business profits.
This change will have significant financial impacts, including:
- Employees using a DCPU for personal mileage will receive higher company car tax bills. A pickup that currently costs a higher-rate taxpayer around £1,800 per year in BIK could jump to over £10,000, depending on the vehicle’s CO2 emissions and list price.
- Businesses will no longer be able to write off the full cost of a DCPU in the year of purchase. Instead, these vehicles will be subject to capital allowance rates as low as six per cent per year, drastically reducing upfront tax relief.
If you purchase or lease a DCPU before April 2025, you will still be able to lock in and benefit from the current tax rules until at least 2029.
Planning your next move
So, the answer to our original question is yes. If you do not want to face the increased financial liabilities, purchasing or leasing your DCPU before April 2025 is the smart move.
Here is what you should consider:
Firstly, you should review whether any of your current vehicles need replacing or if expanding your fleet could make financial sense under the current tax regime.
Think carefully about whether it will be more financially beneficial to purchase the vehicle outright or lease one.
If you do decide to lease, try to avoid contracts extending beyond April 2029, as the new rules will eventually apply.
To minimise BIK charges, ensure any DCPU is strictly limited to work use.
For cars, the definition of private use is stricter, requiring robust controls like vehicle storage and insurance exclusions, which may not be practical for many businesses.
Want to know how buying or leasing a DCPU could affect your tax bill? Get in touch today!
