MP urging farmers to take advantage of transitional tax period on pick-ups

Double cab pick-ups with a payload of more than a tonne have traditionally been classed as commercial vehicles, allowing farmers and company car drivers to enjoy a number of tax breaks.

“This is set to change within weeks when the Labour government’s autumn budget plans will be implemented. As a result, new double cab pick-ups will be classed as company cars for the purpose of capital allowances and benefits in kind. The tax implications of this are considerable, with businesses only eligible to claim standard capital allowances which will vary from 3% to 37% depending on the specific vehicle’s CO2 emissions.

"Double cab pick-ups are the vehicle of choice for many farmers and agricultural businesses, but there are very limited alternatives available to meet HMRC’s definition of a ‘commercial’ vehicle. The problem arises because double cab pick-ups are dual purpose - suitable for carrying both passengers and goods.

“It is interesting to note that single cab and extended cab pick-ups will be unaffected by the changes, as HMRC accepts they clearly demonstrate suitability for commercial use. The VAT treatment of double cab pick-ups remains unaffected.”

The DUP’s Westminster agriculture spokesperson added: "Since the budget was announced, garages across Northern Ireland have reported an unprecedented demand for double-cab pick-ups. Sales have rocketed because people want to take advantage of the current regulations, prior to the commencement of the new rules coming into force on 1st April 2025 for corporation tax and 6th April 2025 for income tax.

“The government has introduced a transitional period which means vehicles purchased or leased before 6th April, will still be classed as ‘commercial’ and will qualify for the existing tax relief measures, up until 5th April 2029.

“This mitigation has prompted a dramatic increase in sales of double cab pick-ups. Customers who purchase, lease or order a new pick-up before the 6 th April 2025, must be able to provide a receipt, deposit documentation or written confirmation from the dealership or garage confirming that the order has been placed.”

Drivers are also facing a rise in road tax next month, as the government is set to introduce new rates for vehicle excise duty. In recent years brand new cars paid a higher rate of vehicle road tax (VED) for the first year, a fee determined by the car’s CO2 emissions.

Carla Lockhart added: "Thanks to the autumn budget, significant increases on are the horizon for first year road tax on new vehicles. This applies to all petrol and diesel cars, but for the first time electric vehicle owners will also be subject to road tax fees. Electric vehicles have been exempt until now.”

The new rates start at £10 per year for a 0g/km vehicle, with 1 to 50g/km vehicles increasing from £10 to £110; and 51 to 75g/km rising from £30 to £130. Vehicles such as diesel pick-ups will fall into the higher emissions tax bracket, eg: 226 to 255g/km, meaning first year road tax will increase from £2,340 to £4,680 from April.

“In addition, the ‘expensive car supplement’ applies to all vehicles, including hybrid and electric vehicles, retailing in excess of £40,000. This fee is applicable in years two to six of the car’s life."

Ms Lockhart continued: ”The labour government cannot be described as ‘farmer friendly’. Sir Keir Starmer has broken all his pre-election promises and seems blinkered when it comes to the day-to-day reality for farmers. Removing tax perks on double cab pick-ups and the increasing cost of road tax are just the tip of the ice-berg. Despite months of campaigning the Prime Minister and the Chancellor have failed to find reverse gear on the crippling inheritance tax plans which are just over twelve months away.

“I was delighted to have the opportunity to meet UFU delegates attending this week’s Pancake Day protest rally in London. More than 10,000 farmers took the streets in opposition to the government’s plans to remove historic inheritance tax and business property relief on working farms.

“The government needs to listen and revise its tax grab agenda. The Chancellor’s policy is unacceptable and comes at a time when the government should be strengthening UK food security, not undermining it and driving farmers out of business.

“I have been opposed to this attack on family farms from the outset, and I will continue to lobby the government and work alongside the farming unions to the bitter end. The fight is not over. No Farmers, No Food!”