Compass Automotive Clarifies VAT Rules Amid HMRC Double Cab Tax Changes
If you’re considering investing in a reliable and rugged Isuzu D-Max pick-up for your business, here’s some good news: you can still reclaim VAT on your purchase, despite the recent changes introduced by HMRC.
At Compass Automotive, we understand that new tax rules affecting double cab pick-ups may have raised questions. We’re here to clear the air—especially when it comes to the Isuzu D-Max, which continues to deliver serious value for VAT-registered businesses.
✅ VAT RECLAIMS REMAIN UNCHANGED
Let’s set the record straight: if your business is VAT-registered, you can still reclaim VAT on any Isuzu D-Max pick-up with a payload of over one tonne—and that includes the entire D-Max range.
Although HMRC introduced new rules from 6th April 2025, these changes do not affect VAT eligibility. The legislation only impacts areas such as Benefit in Kind (BIK), capital allowances, and business profit deductions.
🔄 What Changed After April 2025?
Here’s a breakdown of the key updates that came into effect:
📉 Benefit in Kind (BIK):
As of 6th April 2025, double cab pick-ups are now treated as company cars for BIK purposes. This means they are taxed based on their CO2 emissions, rather than the previous flat rate.
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BIK rates now range from 2% to 37%
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Electric models with over one tonne payloads are now taxed at 3%, increasing by 1% annually until 2028.
🧾 Capital Allowances:
Double cab pick-ups are no longer classified as “plant and machinery”. Instead, they are treated as company cars for capital allowance purposes.
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Allowance rates now depend on CO2 emissions: 6%, 18%, or 100% based on environmental performance.
📉 Business Profit Deductions:
These pick-ups are also now treated as cars when it comes to deductions from taxable profits, following their reclassification by HMRC.
🚫 Single Cabs Remain Unaffected
It’s important to note that single cab pick-ups are not affected by the new rules. HMRC continues to classify them as clearly commercial vehicles.
Why Did the Changes Happen?
These updates stem from a Court of Appeal ruling (Payne & Ors), which found that double cab pick-ups offer equal suitability for transporting goods and passengers. As a result, HMRC has reclassified them for BIK and capital allowance purposes—but not for VAT.
🚀 Isuzu D-Max: Still a Smart Choice
With a payload comfortably over one tonne and a reputation for toughness and reliability, the Isuzu D-Max remains an outstanding option for business buyers. And with VAT still fully reclaimable, it continues to be a tax-smart investment.
📞 Contact Compass Automotive Today
Speak with our team and explore the full Isuzu D-Max range.
📍 Compass Automotive
📞 01278 662836
🌐 www.compassautomotive.co.uk
📧 [email protected]
Take full advantage of VAT reclaim and drive forward with confidence in an Isuzu D-Max.
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