Users of double-cab pick-ups will be be facing much higher benefit-in-kind tax bills from next April as a result of the Budget.
The new Labour Government’s first Budget Statement, delivered by Chancellor of the Exchequer Rachel Reeves in the House of Commons on 30th October, included a surprise retention of the fuel duty freeze and a commitment to continue incentivising electric vehicle users, measures broadly welcomed.
However analysis of the detail of the Budget revealed some significant tax rises including a major change in the Benefit-in-Kind (BIK) status of double-cab pickups.
From April 2025 double-cab vehicles of one tonne or more will be treated as company cars, which will mean much higher BIK for their drivers and lower capital allowances for the businesses using them. However grandfather rights will apply to existing users until the 2029-30 tax year at the latest.
Under the new regime a typical user of a Ford Ranger, for example, could pay three and a half times more in BIK than they do currently, while a business formerly able to reclaim 100% of the price of the vehicle will now be limited to just 18%.
A similar measure was announced by the previous Conservative administration in February 2024 and then abandoned just a week later following major criticism, particularly from the farming industry.
The Budget also included major changes to the tax status of plug-in hybrid vehicles, which while continuing to see their BIK rates increase under a two points per year ratio as full EVs over the next three years, will in 2028-29 jump to 18% – 11% more than for a full EV.
Hollick, chair of the Association of Fleet Professionals, described the measures as something of a tidying-up operation by the Government, which he said was; “making it pretty clear that it wants all company car drivers behind the wheel of a zero-emissions electric car while paying benefit-in-kind at the standard rate. Almost anything that resembles a departure from this model has gone.”
Whether the new double-cab rates will result in more protests from farmers remains to be seen – the Budget also included major changes to inheritance tax rules for farms which sparked major anger from the agricultural community.
