HMRC has introduced many updations in car tax rates which will impact certain vehicle owners from April 2025. The main changes include that the double cab pick up trucks with a payload of at least one tonne will be taxed as cars under BiK or capital allowance purposes.
Electric vehicles will face an annual standard tax rate of £195 after the first year tax rate of £10. Able has started a campaign to provide awareness to people about the April car tax changes. Certain other vehicles including hybrid, AFVs, electronic vans and motorcycles, etc will also be impacted by these new rules.
HMRC Car Tax Changes April
The HMRC has announced significant changes to the car tax regulations which are set to take place from April 2025. These changes will impact various vehicle categories including electric vehicles, double cab pick up trucks, and traditional petrol and diesel costs.
One of the most notable changes includes the reclassification of double cab pick up trucks with a payload of at least one tonne.
These vehicles will no longer be classified as vans for benefit-in-kind (BIK) or capital allowance purposes from 6 April 2025. HMRC has said that it will no longer apply the definitions of car and van for VAT purposes in the same previous way for tax purposes.
As of April 6, 2025, double cab pick-ups must be classified by “evaluating the vehicle as a whole at the time of availability in order to identify whether the vehicle construction has a primary reliability”. Electric Vehicles, which were previously exempted from Vehicle Excise Duty(VED) will face standard tax rate from 1 April 2025.
According to the several warnings, the Benefit-in-Kind tax payments go up dramatically for Businesses and Drivers since they will be taxed alongside some of the most polluting petrol and diesel cars which often receive a rate of more than 35%. To know the changes in detail, scroll this article.
List of Key Changes of HMRC Car Tax
Here are the key changes of HMRC Car Tax which will affect certain vehicle owners from April 2025.
Reclassification of Double Cab Pick-up Trucks:
- The Double Cab Pick-up Trucks with a payload of at least one metric tonne will be classified as cars for tax purposes and this change will affect Benefit-in-Kind (BiK) tax rate, capital allowance and deductions from businesses profits.
Changes for Petrol and Diesel Vehicles:
- The Petrol and Diesel Vehicles will face an increase in first year tax rates which is a part of the government effort to encourage the adoption of cleaner vehicles.
Vehicle Excise Duty(VED) for Electric Vehicles:
- Electric and zero emission vehicles with a list price exceeding £40,000 will incur an “Expensive Car Supplement” for five years. Electric Vehicles will now be taxed as per their registration duration:
- Electric, zero or low emission cars registered on or after 1 April 2025 will face £10 for the first year tax rate following an annual tax rate of £195.
- Electric, zero or low emission cars registered between 1 April 2017 and 31 March 2025 will be taxed as per the standard rate of £195.
- Electric, zero or low emission cars registered between 1 March 2001 and 31 March 2017 will face the first band that has a VED value £20.
Hybrid and AFVs Changes:
- There will be no £10 annual discount for hybrid and AFVs Vehicles and the vehicles will be taxed as:
- For vehicles registered before April 2017, tax rate will depend on the vehicle’s registration date and CO2 emissions.
- For vehicles registered after April 2017, the standard rate of £195 will apply.
Electric Vans and motorcycles Vehicles:
- The most electric vans will see the standard annual rate for light goods vehicles while the Electric motorcycles and tricycles will be taxed based on the rate of smallest engine size.
What Alan Able has said about the HMRC Car Tax Change April?
Alan Able who is the managing director of Isuzu UK has shared his thoughts on the HMRC Car Tax Change April. He appreciated these changes that have provided clarity to businesses and individuals on how double cab and extended cab pick-ups will be taxed under Benefit-in-Kind and capital allowance rules from April.
Able has called out drivers for helping them to secure a new double cab pick-up truck before April 2025 by raising awareness about the HMRC car tax changes. He has also said that before the latest regulations go into effect, replace your double cab pickup to keep the current tax savings until April 2029.
He has encouraged people to find alternatives such as single cabs will not be affected compared to the extended cab pick-ups and they may qualify for more favourable tax treatment. After April 2025, double cab pick-up drivers will face such substantial taxes which they have not anticipated.