DCPUs: Contractors, get out of first gear to drive with tax-efficiency

Double Cab Pick-Ups (DCPUs) will be classed as cars from April 6th 2025 for capital allowances, benefits-in-kind, and some deductions from business profits, writes Dan Mepham, boss of SG Accounting.

Double Cab Pick -Ups: The tax roundabout

While this more taxing future for DCPUs might not be news to contractors who’ve kept their eyes firmly on the journey of Double Cab Pick-Up taxation, the u-turns have been tricky for even us contractor accountants to manoeuvre, mentally!

In fact, we’ve had an HMRC U-turn on DCPUs, then a chancellor Autumn Budget U-turn on that U-turn, plus wording tweaks in the past 12 months alone.

But the tax position of Double Cab Pick-Ups is now very clear. And the much-disliked acceleration in the BIK tax due on DCPUs, with the effect they’ll be treated as company cars, is this time definitely happening.

So, what do contractors need to know about DCPUs? And should you rush to buy a Double Cab Pick-Up before April 6th 2025, when the new taxing future for these versatile vehicles arrives?

What is a DCPU?

The definition of a DCPU is a pick-up truck that has a cabin with four doors and two rows of seats. The vehicles can therefore carry four or more passengers as well as the driver, in addition to an open cargo bed at the back.

You can see why these vehicles are a favourite of not just contractors in the IT and computing sector!

The HMRC definition of a Double Cab Pick-Up had previously centred on the four doors being capable of being opened independently.

However, the very latest DCPU guidance by HMRC (updated Feb 20th 2025) omits the need for all four doors to be able to be opened independently.

DCPUs: Doors hinged at front or rear?

Having a bit of a personal soft spot for these hard-wearing vehicles, I’ve seen some discussions online about whether it makes a difference if the doors are hinged at the front or the rear.

To clarify with my contractor accountant ‘hat’ on – it does not matter. If the pick-up has four doors, it is likely to be classed as a car for tax purposes.

The logic is that a vehicle with four doors is more likely to be used for purposes other than (or as well as) carrying goods. It stems from the recent DCPU ruling from the courts (Coco-Cola v HMRC at the Court of Appeal in 2020), establishing that where no clear “predominant suitability” for carrying goods can be identified, the default should be that a DCPU is treated as a car.

What about two-door pick-ups?

Two-door pick-up versions are normally accepted to be vans and will continue to be treated as such for tax purposes.

Is it worth buying a DCPU before new tax year 2025-26, on April 6th 2025?

All DCPUs purchased after April 1st 2025 - for corporation tax purposes  - and April 6th 2025 - for income tax purposes, will be treated as cars, including for capital allowances, BIK, and certain deductions from business profits.

Partly explaining the outcries and corresponding U-turns, the DCPU tax changes here will have significant, adverse financial impacts on contractors and others wanting to get behind the wheel of a DCPU for more than just a test drive!

Double Cab Pick-Up Tax Changes: Two sharp stings

• Up front tax relief from HMRC will be drastically reduced because businesses will no longer be able to write off the full cost of a DCPU in the year of purchase. Instead, these vehicles will be subject to capital allowance rates -- as low as six per cent per year.
• Benefits in Kind tax will increase considerably. For example, a pick-up that might cost a higher-rate taxpayer around £1,800 per year in BIK, could jump to over £10,000, depending on the vehicle’s CO2 emissions and list price.

If you purchase or lease a DCPU before April 2025, you will still be able to benefit from the current tax rules until at least 2029. So if you were thinking about buying or renting a DCPU anyway, it’s definitely worth getting out of first gear!

Transitional rules apply

Transitional rules are in place if the Double Cab Pick-Up is purchased before April 5th 2025.

Examples below help illustrate how these rules will apply (N.B. these examples aren’t ours – they are from HMRC’s website).

HMRC’s four DCPU tax examples

• Example 1 – Employer A purchased a double cab pickup (extended model) on 14 September 2025. As purchases on or after 6 April 2025 would be subject to the new rules, in this example the vehicle would be classified as a car and a car benefit charge would arise.

• Example 2 – Employer B leased a double cab pickup on 10 December 2024. As this was leased before 6 April 2025, the previous rules continue to apply for Employer B until the earlier of the lease expiry, or 5 April 2029.

• Example 3 – Employer C purchased a double cab pickup on 10 January 2024. This was subsequently traded in on 10 April 2025 for another double cab pickup. The previous rules apply to the first vehicle for Employer C until the trade in point on 10 April 2025. As the new double cab pickup was purchased after 6 April 2025 it will represent a car under the new rules and a car benefit charge would arise.

• Example 4 – Employer D placed an order for a double cab pickup on 5 January 2025, but this was not available to the employer until 2 September 2025. As the agreement was entered into before 6 April 2025, the previous rules continue to apply for Employer D until the earlier of disposal, lease expiry, or 5 April 2029. 

DCPU tax to-ing and fro-ing has been disconcerting - now there's certainty, at a cost…

In summary, DCPUs will be treated as cars for tax purposes from April 2025 following what’s becoming a fairly standard amount of legislative tinkering from HMRC. Changes from policy decision-makers and their conflicting objectives routinely create this ‘will they, won’t they’ tax uncertainty, and with the potential of impacting not only contractors, but also farmers, van drivers, and ultimately the UK economy, our accountancy firm was pleased when the original U-turn was made in February 2024.

But this relief has proved to be short-lived as the change was reinstated just six months subsequently and, worse still, after an Autumn Budget that left the contracting market spluttering from more than just DCPU reasons!

Consult a trusted, experienced and DCPU-friendly accountant if you’re looking to get on the road with one or more of these popular vehicles in still the least taxing way possible, but if tax-efficiency really matters, before Sunday April 6th 2025.