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Double-cab pick-ups, such as the Ford Ranger and Nissan Navara, will no longer be tax efficient.
The UK government has recently made an announcement regarding double cab pick-up trucks, which have become increasingly popular due to their versatility and ability to be used for both personal and work purposes. These vehicles are usually considered as vans if they carry a payload of over a tonne, making them eligible for tax breaks.
However, starting July 1, 2024, the government will classify most double cab pick-up trucks as cars instead of vans for tax purposes. This means that these vehicles will no longer be eligible for the cheaper company car tax. The government has explained that this change is due to the fact that these trucks are equally suitable for transporting goods and passengers.
This change in tax classification will be assessed on a case-by-case basis, and it will impact those who own double cab pick-up trucks or are considering purchasing one.
How will costs be calculated?
Company car tax is calculated based on benefit in kind (BIK). For cars, this is based on their CO2 emissions and list price. Electric and hybrid cars that emit lower CO2 are more favorable. However, pick-up trucks are currently charged at a flat rate of £3,960 for the 2023/2024 tax year. Van BIK is £792 per year, or £66 per month for a 20% taxpayer, and £1,584 per year, or £132 per month for a 40% taxpayer.
But now, pick-ups will become more expensive for company car tax as these taxes will be calculated based on their CO2 emissions. For instance, the most popular pick-up in the UK – Ford Ranger – has CO2 emissions of over 200g/km, putting it in the highest BIK tax bracket of 37%. A driver using a Ford Ranger Wildtrak 2.0 as a company car will have to pay a tax bill of £290 per month or £580 per month for a higher rate taxpayer. This means a driver could end up spending £5,376 more on company car tax per year under these new rules, making a double cab pick-up uneconomical to run. As a result, demand for these vehicles is likely to fall.
So what does this actually mean?
It means that now is actually a great time to buy a Transporter instead! Unlike the Pickup trucks that will soon be loosing value with an influx in the market, the Transporter Panel conversions value will be stronger than ever, especially with the imminent demand of the T6.1 due to the stop in production of German built VW Transporters.