Hidden tax change to hammer drivers with £5,000 | Tech News

Thousands of drivers who depend on double-cab pick-up vehicles for his or her jobs are dealing with a sharp rise in tax payments after a rule change got here into power final yr. The replace impacts tradespeople, farmers, supply employees and small business homeowners who rely upon these autos for each work and personal use. For years, double-cab pick-ups had been handled as vans for tax functions, which meant a lot decrease expenses for these utilizing them as company autos. 

But that modified in April 2025, when the Government reclassified these vehicles as automobiles for sure tax guidelines. The change applies to any double-cab pick-up ordered or registered on or after April 6, 2025. Under the outdated system, vans had a easy, flat “benefit in kind” (BiK) fee of £4,020. A basic-rate taxpayer paid £804 a yr, and a higher-rate taxpayer paid £1,608. This made fashions just like the Ford Ranger, Toyota Hilux and others a widespread alternative for employees who needed space for instruments in addition to a second row of seats for household use.

But now these identical vehicles are being taxed like normal passenger automobiles, and since of their dimension and better CO2 emissions, the invoice has soared.

The tax is now calculated as a proportion of the vehicle’s record price slightly than the outdated fixed van fee.

To show the dimensions of the increase, we are able to have a look at calculations for a Ford Ranger Wildtrak with a record price of round £48,000.

The model falls into the highest 37% emissions bracket, that means its taxable benefit shoots up from £4,020 to £17,760.

For a basic-rate taxpayer, which means an annual tax charge leaping from £804 to £3,552. A better-rate taxpayer would see their yearly invoice rise from £1,608 to over £7,100, an increase of more than £5,000.

Fuel prices create an even greater hole. Under the outdated van guidelines, the fuel benefit was roughly £769, that means a basic-rate taxpayer paid £153, whereas a higher-rate taxpayer paid £307.

But underneath car guidelines, there may be no fixed fee. Instead, the taxman applies a normal determine of about £28,200, then multiplies it by the emissions proportion, The Sun stories.

For the Wildtrak, this implies a taxable fuel benefit of £10,434, leading to more than £2,000 in fuel tax for a 20% taxpayer, far larger than the earlier system.

A Treasury spokesperson mentioned the change adopted a legal ruling: “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.”

Industry consultants warn that smaller companies will battle essentially the most. Many use these vehicles as multi-purpose autos, carrying heavy tools during the day and doubling as household transport within the evenings.

Matt de Prez, the editor of Fleet News, mentioned the influence will probably be widespread throughout trades.

He added that small companies equivalent to plumbing companies will really feel it sharply as a result of “drivers often use work vans for personal use too”.

Sarah Coles, the top of personal finance at Hargreaves Lansdown, mentioned the modifications might depart some corporations with a lot larger payments.

She added: “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.”