DOUBLE cab pick ups have come a long way from just being the farmer’s friend or a utilitarian vehicle supporting builders. They are now built to suit all purposes – from the original tough working tool to the luxurious high spec variant. No wonder drivers choose them as company cars – but that also means company car tax is payable on a double cab pick up.
But, there is good news. The benefit in kind tax you pay on a double cab pick up is a lot less than if you drove a company car.
Currently, HM Revenue & Customs classifies these pick ups as vans – as long as they have a payload of 1 tonne (1000kg) or more. A payload means the vehicle’s gross vehicle weight less its unoccupied kerb weight.
Where a pick up has a hard top, this is given a generic weight of 45kg. So a pick up that has a payload of 1010kg will convert to a car under these definitions. So it’s important to ensure your pick up qualifies for company double cab tax.
What are the company double cab tax rates?
For the tax year 2016-17 the benefit in kind on a double cab pick up is £3170. So if you pay tax at 20% that’s just £634 a year, or £1268 for a 40% tax payer. Not bad!
What about ‘free fuel’ for your double cab?
If your company also pays for private mileage fuel in your double cab pick up, you as the driver is taxed on this, too. The annual company double cab tax liability for free fuel is £598 – the same as the van fuel benefit.
- So a 40% income tax payer will be charged 40% of £598 for free fuel: £239.20 per year. That’s in addition to the £1268 company double cab tax.
- For a 20% taxpayer it’s £119.60 on top of the £634 double cab tax.
- Whichever way you look at it, that’s a useful way to lower your benefit in kind tax exposure
However, if you cover no private mileage, there is no tax to pay. The taxman does not count driving the pick up between home and work as private mileage. So if you take the pick-up home at night and do no other mileage, you do not have to pay company double cab tax.
Use our company car tax calculator
- Work out what you’ll pay in tax – click here for our company car tax calculator
- Includes double cabs!
The taxman allows some ‘insignificant’ private use: such as dropping a child off at school on the way to work. But if the double cab pick up is regularly used to do the supermarket run, that is counted as private mileage.
An employer pays Class 1a National Insurance on taxable benefits – this includes company double cab tax.
Keep a mileage record
HM Revenue & Customs suggests that to avoid possible confusion, and tax liability, a mileage record is kept; an agreement is signed about vehicle use; use of the vehicle is put into a contract of employment.
In reality, most luxuriously equipped double cab pick ups, are likely to be used for private mileage.
Company double cab tax is not applicable if the owner is a sole trader or partner.
- It is worth talking to a tax planner, such as an accountant, if you want to understand the full tax implications of running a double cab pick up.
How can you reduce your tax exposure?
- Find out more by going to our company car tax section.