Isuzu clarifies tax treatment for Double & Extended Cab pick‑ups: VAT & Road Tax still unchanged

• Despite recent tax changes, all Isuzu D-Max pick-ups still benefit from £345 annual road tax and full VAT reclaim (for vehicles with over 1-tonne payload and VAT-registered businesses making fully taxable supplies).
• Since April 2025, double and extended cab pick-ups are now classed as company cars for Benefit-in-Kind and Capital Allowance purposes.
• With ongoing confusion across buyers, accountants, and dealers, Isuzu UK is helping the industry navigate these changes with clear guidance and tools.

Isuzu UK is committed to clarity and transparency following the significant tax changes introduced in April 2025. While Benefit-in-Kind (BIK) and Capital Allowances (CA) legislation for double and extended cab pick-ups have shifted, classifying them as company cars for tax purposes, Vehicle Excise Duty (VED, also known as road tax) remains at the commercial level of £345 per year, and VAT is still fully reclaimable on vehicles with a 1‑tonne payload for VAT‑registered businesses making fully taxable supplies.

Despite the shift in classification, VED for these vehicles continues to be charged at the commercial vehicle rate of £345 per year, offering continued affordability for business users.

Similarly, VAT remains fully reclaimable on all double and extended cab pick-ups with a payload exceeding one tonne, provided the purchasing business is VAT-registered making fully taxable supplies. These two core financial advantages provide essential ongoing support for businesses that rely on pick-ups for day-to-day operations.

As of 6^th April 2025, newly registered double and extended cab pick-ups are now subject to company car BIK rates, which vary from 3% to 37% depending on CO₂ emissions. Zero-emission vehicles with payloads over one tonne begin at the lower end of this scale, with a 3% rate increasing by one percentage point annually until 2028.

However, a transitional period is in place. Pick-ups that were ordered, purchased, or leased before 6^th April 2025 will retain their previous classification and benefit from the historic flat-rate commercial vehicle BIK treatment until disposal, lease expiry, or 5^th April 2029.

Capital Allowance rules have also changed as of 1^st April 2025 for corporation tax and 6^th April for income tax. Double and extended cab pick-ups are no longer eligible for treatment as ‘plant and machinery’ and are now taxed in line with company car writing-down allowances, which are calculated based on CO₂ output. These rates can be 6%, 18%, or 100% for zero-emission vehicles. It is important to note that expenditure must be incurred prior to 1^st October 2025 to fall under the old regime.

Industry feedback gathered by Isuzu UK has revealed widespread misunderstanding regarding the extent of these legislative changes. Internal research and dealer insight show that over 71% of pick-up buyers, 68% of accountants, and 59% of non-Isuzu dealers are still uncertain about how the changes affect VED and VAT. This has led to frequent and unnecessary concerns, especially among professionals in agriculture, construction, and other commercial sectors who rely on pick-ups as working vehicles.

Alan Able, Managing Director of Isuzu UK, commented: “As the Pick-Up Professionals, we and our dealer network are having the same conversations daily. We want to reassure the public and business owners that VAT remains reclaimable, and VED is still at the commercial rate. These benefits continue to support tradespeople, farmers, and fleet operators across the UK.”

The change in legislation originates from a Court of Appeal ruling, which found that double and extended cab pick-ups do not demonstrate a predominant suitability for transporting goods over passengers. As a result, HMRC has moved to classify these dual-purpose vehicles as cars for the purposes of BIK, CA, and deductions from business profits.

It is important to clarify, however, that single cab pick-ups are unaffected by this change and will continue to be treated as commercial vehicles in all respects.

Oliver Garner, Head of Tax at Isuzu UK, added: “We understand these changes are complex. Our priority is helping customers navigate this evolving landscape with clear, factual guidance, particularly around order dates, payloads, and eligibility for transitional relief.”

Isuzu UK remains committed to supporting both customers and dealers through this transitional period. The brand will continue to engage with government and industry bodies and will provide regular updates as the situation evolves. Clear, accurate information remains central to Isuzu’s mission to serve working professionals across the UK.

Taxation Changes for Double and Extended Cab Pick-Ups

For Capital Allowances (CA), the changes came into place on 1^st April 2025 for corporation tax and 6th April 2025 for income tax, whereas for Benefit-in-Kind (BIK), the changes were introduced on 6^th April 2025.

For further guidance and frequently asked questions, please visit: www.isuzu.co.uk/bik.