Double Cab Pick-Ups: Car or Van for Your Company?

HMRC used to follow the VAT test: a payload of one tonne or more meant a van. Following the Court of Appeal's Coca-Cola decision, it now looks at the vehicle as a whole. EIM23151 says most double cabs are equally suited to passengers and goods, so they default to cars. This applies from 1 April 2025 for Corporation Tax and 6 April 2025 for income tax and National Insurance.

For 2026/27, a van with private use has a flat benefit of £4,170, plus £798 if fuel is provided (GOV.UK). As a car, the benefit is list price times a CO2-based percentage, up to a maximum of 37%, reached at 155g/km for petrol, or 135g/km for most diesels (which carry a 4% supplement unless RDE2 compliant), for 2026/27 (HMRC).

For a £40,000 pick-up at 37% and a higher-rate director:

• As a car: benefit £14,800, income tax £5,920, employer Class 1A NIC at 15% £2,220.
• As a van: benefit £4,170, income tax £1,668, Class 1A £625.50.

Free private fuel makes the gap wider: 37% of the £29,200 car fuel multiplier is £10,804, against £798 for a van.

Under EIM23151's transitional rules, if the company purchased, leased or ordered the pick-up before 6 April 2025, van treatment continues until the earlier of disposal, lease expiry or 5 April 2029. Trading it in ends it, so keep the dated order or lease paperwork.

Under CA23511, spending from 1 April 2025 on a double cab is spending on a car, unless it arose under a contract made before then and was incurred before 1 October 2025. Cars do not get the Annual Investment Allowance or full expensing (GOV.UK). A pick-up emitting over 50g/km goes into the special rate pool at 6% a year. For leased cars over 50g/km, 15% of the lease rental is disallowed.

No. EIM23151 confirms the VAT input tax position is unchanged, so a pick-up with a payload of one tonne or more remains a commercial vehicle for VAT.

From 6 April 2027, company cars, vans and fuel benefits must be reported and taxed through payroll rather than on a P11D (GOV.UK). See payrolling benefits in kind and our company cars guide.

Our payrolling benefits in kind service sets up the benefit correctly before the April 2027 deadline. Monthly packages start from £45.83 + VAT, and the exact fee for this work is confirmed in writing first. You can book a free intro call about our services; advice on whether your company should buy or lease a pick-up is a paid consultation.