Tradespeople and small business owners across the UK are facing a dramatic surge in their vehicle tax bills from April, due to a significant but little-publicised change in tax rules. The shift, which sees double-cab pick-up trucks reclassified as cars rather than vans for tax purposes, could cause benefit-in-kind (BiK) charges to quadruple for thousands of drivers.
The End of a Tax-Efficient Loophole
For years, double-cab pick-ups – trucks with two rows of seats – were treated as commercial vans for tax calculations. This classification offered a major financial perk, as vans attract a flat benefit-in-kind value of just £4,020. This made them a highly tax-efficient choice for individuals who used the same vehicle for both work and personal life.
However, this loophole was closed following a Court of Appeal judgement. The Labour Party government implemented the change in April 2025, with the new rules now coming into full effect for the upcoming tax year. A Treasury spokesperson confirmed the policy shift, stating: “Following a judgement by the Court of Appeal, Double Cab Pick-ups should now be treated as cars for certain tax purposes, and we have put in place rules to help businesses transition to the new system.”
Who Will Be Hit Hardest?
The impact is expected to be most severe for small businesses and self-employed tradespeople, such as plumbers, builders, and electricians, who commonly rely on these versatile vehicles. Matt de Prez, editor of Fleet News, highlighted that drivers in these sectors often use their work vehicles for personal purposes, making them liable for the increased BiK tax.
Financial experts have issued urgent warnings about the potential cost. Sarah Coles, head of personal finance at Hargreaves Lansdown, explained the stark consequences: “Where companies have flexibility to change their fleet, it could restrict choice. But where they are stuck with a particular model for a period it could quadruple their tax bill.”
Future Implications and Potential Alternatives
The tax change has raised concerns that other dual-purpose vehicles might face similar reclassification in the future. Westwood Motor Group pointed out that crew cab vans could potentially “go the same way as pickups in due course, ending up permanently classed as cars at some point.”
For businesses seeking alternatives, the industry suggests that car-derived vans (CDVs) remain a viable option. These vehicles, which range from converted hatchbacks to models like the Land Rover Discovery Commercial, stay within the more favourable van BiK tax bracket as they are designed solely for commercial use.
The key takeaway for affected drivers and businesses is to review their current vehicle arrangements and future purchasing plans immediately. With the new tax year beginning on 6 April, understanding the full financial impact of this reclassification is crucial for budgeting and avoiding an unexpected and substantial tax demand.
