HMRC Says VAT and VED Rules Unchanged but Double-Cab Pick-Ups Stay Classified as Cars for Company Tax

HMRC confirmed that VAT refund rules and Vehicle Excise Duty treatment for double cab pick-ups have not changed, GB News reported. The clarification was issued more than one year after most double cab pick-ups were reclassified as cars for company car tax purposes in April 2025.

HMRC updated its Employment Income Manual after businesses and fleet operators raised questions about how the April 2025 changes affected other taxes.

VAT-registered businesses can still reclaim input VAT on eligible double cab pick-ups under existing rules, the agency said. Vehicle Excise Duty treatment is also unaffected. Isuzu UK confirmed that its entire D-Max range qualifies for full VAT reclaim for VAT-registered businesses.

Every D-Max model has a payload of more than one tonne and a towing capacity of 3,500 kg, the company said. Isuzu UK offers zero per cent APR finance on its new electric pick-up through a Hire Purchase agreement that requires a 50 per cent deposit followed by 36 months of interest-free payments.

The April 2025 change ended HMRC's use of the same definition of car and van for Benefit-in-Kind tax purposes as for VAT.

Before the change, a double cab pick-up with a payload of at least one tonne was generally treated as a van for company car tax. HMRC altered its approach after the 2020 Court of Appeal ruling in Payne and others, the Coca-Cola case, which held that a vehicle without a clear main purpose of carrying goods should generally be treated as a car.

The annual VED rate for affected pick-ups remains £360 for both electric and petrol or diesel models.