Pick-up truck reallocation 'will fall foul of tax change'

Reallocating a pick-up truck to another employee after April 6, will change the tax treatment of the vehicle, irrespective of when it was ordered.

The warning to fleet decision-makers comes ahead of double cab pick-up trucks being treated as company cars.  

The change, which was announced in the Autumn Budget, will dramatically increase the benefit-in-kind (BIK) tax paid by drivers by thousands of pounds.

Transitional BIK arrangements will apply for employers that have purchased, leased, or ordered a double cab pick-up before April 6, irrespective of when it is delivered. 

The Treasury says that they will be able to use the previous treatment, until the earlier of disposal, lease expiry, or April 5, 2029.

Vehicles ordered after April 6, 2025, will be treated as company cars for BIK and capital allowances.    

However, if a vehicle is reallocated after April 6, despite being ordered prior to the tax change taking effect, it will be treated as a company car.    

Tax specialist Harvey Perkins, co-founder of HRUX, said: “If you order the vehicle on or after April 6, it’s a car. If you order it before April 6, it’s a van. There’s no deadline for delivery of the vehicle.

But he added: “If you change the user of that double cab pick-up, it immediately becomes a car.”

Appearing on a tax webinar organised by the Association of Fleet Professional (AFP), Perkins explained how reallocation of pick-up trucks will impact the vehicle’s tax treatment.  

“If you order a double cab pickup before April 6 and put Fred in it, and then in a year’s time Fred leaves, and then you put Susan in it, for Susan, it’s a car immediately.”

HMRC recently updated guidance on the taxation of double cab pick-up trucks after fleets were left confused as to which vehicles would be subject to company car tax.