FORESTERS and arborists face being hit by yet more costs after the government quietly announced a major change to the taxation of double cab pick-up trucks.

From July, the vehicles will be classed as cars, in a move likely to significantly shake up the popular pick-up truck market and lead to lower sales. 

For around two decades, private individuals have been able to run pick-ups as company cars and pay significantly less benefit-in-kind than if they were a regular saloon, hatchback or SUV.

However, HM Revenue and Customs (HMRC) announced in a note that this will change from July 1, 2024, saying that it will "no longer interpret the legislation that defines car and van for tax purposes in line with the definitions used for VAT purposes".

HMRC says it will now assess the classification of each vehicle of this type on an individual level, but says that from July 2024 "most if not all double cab pick-ups will be classified as cars when calculating the benefit change". HMRC says this is because these vehicles are ‘equally suited’ to both transporting goods and also passengers.

Mike Hawes, chief executive of automotive trade body, the Society of Motor Manufacturers and Traders (SMMT), criticised the move, telling fleetnews: “Double cab pick-ups are critical business tools for many companies and sole operators across Britain, particularly in rural areas and in the construction sector.

"With the new rules due in July, there is insufficient time for industry to adapt to such a major policy change, and the sector believes that it would be remain fairer and simpler to use a vehicle’s type approval as the basis for all tax purposes.”

Company vehicle tax is based on benefit in kind (BIK), which on cars is a percentage based on their CO2 emissions that takes into account a vehicle’s list price. It favours electric and hybrid cars, which emit lower CO2.

However, currently, pick-up trucks are charged at a flat rate which is £3,960 for the 2023/2024 tax year. For a 20 per cent taxpayer, van BIK is £792 per year, or £66 a month. For 40 per cent taxpayers, it’s £1,584 per year, or £132 a month.

But under these changes, pick-ups will become significantly more expensive for company car tax, because it will now be calculated based on their typically-high CO2 emissions. 

Transitional arrangements will apply for employers that have purchased, leased, or ordered a double cab pick-up before July 1, 2024, whereby they will be able to rely upon the previous treatment until the earlier of disposal, lease expiry, or April 5, 2028.