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Pickup trucks are a popular choice for construction workers and other tradespeople who are entitled to the use of a company car. While company car tax, or benefits-in-kind (BiK) tax is part and parcel of acquiring any business-owned car, pickups offer the advantage of a flat rate rather than a percentage rate which decreases or fluctuates depending on the fuel type (like car BiK tax which is advantageous for hybrid and electric car drivers).
How much is company car tax on pickups?
While the driver can expect to pay a flat rate regardless of which pickup* they acquire through their company, the BiK tax rate is still determined by their taxable income brackets of 20% and 40%. Typically, the 2021/2022 figures for pickup benefits-in-kind tax is as follows:
- £53.33 average per month at the 20% BiK rate
- £116.67 average per month at the 40% BiK rate
*As long as the pickup meets the requirements laid out by HMRC and DVLA.
What are the HMRC’s requirements for a flat-rate pickup?
While most pickups meet the requirements for flat-rate Bik tax, some do not. Just like vans – which are treated the same in terms of flat-rate BiK tax – pickups must be able to carry at least 1,000kg in `pay load` to be eligible. Otherwise, questions may be raised by HMRC as to how a pickup with a low payload can effectively carry out work-related tasks.
It is important to note that flat-rate road tax (laid out by the DVLA) differs from flat-rate BiK tax, which is dictated by HMRC. If you are unsure, we recommend speaking to a chartered accountant for further guidance.
