Diesel drivers face new car tax rules under VED shake-up coming from April

James Rodger
·2-min read
Diesel drivers face new car tax rules under VED shake-up coming from April
-Credit: (Image: Reach Publishing Services Limited)


Diesel drivers face a new Vehicle Excise Duty (VED) and car tax system under the Labour Party. Motorists and road users with a certain type of vehicle face hefty increases in car tax rates under major changes to DVLA rules and the Labour government.

As of April 2025, double cab pick-ups with a payload capacity of one tonne or more will be classified as passenger cars for tax purposes. This shift means that these vehicles will no longer benefit from the tax treatment traditionally given to light commercial vehicles.

This change will have notable implications for those who use double cab pick-ups for business, as it affects capital allowances, Benefit-in-Kind (BIK) taxation, and business profit deductions. Under the current rules, all pick-ups are subject to a fixed car tax benefit of £3,960.

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But from next year, for Corporation Tax, double cab pick-ups will be treated as passenger cars. 6 April 2025 – For Income Tax, double cab pick-ups will follow the same classification for BIK and profit deductions. The current flat BIK rate for double cab pick-ups (around £3,960 annually) will no longer apply, as the new treatment will calculate BIK based on the passenger car model. For those who use their vehicles primarily for work, this reclassification means potentially higher tax obligations.

The Autumn Budget document reads: “Following a Court of Appeal judgement, the government will treat double cab pick-up vehicles (DCPUs) with a payload of one tonne or more as cars for certain tax purposes. From April 1, 2025, for Corporation Tax, and April 6, 2025, for income tax, DCPUs will be treated as cars for the purposes of capital allowances, benefits in kind, and some deductions from business profits.”

Businesses can only claim capital allowances on double cab pick-ups if they are purchased before April 2025. This means that any double cab pick-up acquired from April 2025 onward will follow the passenger car capital allowance model.

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