Is a Pick-Up Van Better For Your Business?
Choosing the right commercial vehicle for your business is an important design. But pickup vans fall into something of a grey area. So in this article, we’re going to address whether a pickup truck is classed as a van or not.
You may wonder why it’s important to distinguish whether a pickup is classed as a van or not. But there is a valid reason: Tax regulations in the UK mean you may end up paying more from your personal pocket if you invest in a pickup truck.
The UK government classes pickup vans as car-derived vans (CDV). Since 2016, CDVs such as the Ford Fiesta van, Vauxhall Corsa and Renault Clio van were listed as a Benefit In Kind rather than being offset against VAT.
The UK.GOV website explains that Schedule 6 of the Road Traffic Regulation Act 1984 describes a car-derived van as:
‘A goods vehicle which is constructed or adapted as a derivative of a passenger vehicle and which has a maximum laden weight not exceeding 2 tonnes.’
This means that pickup trucks are not restricted to the slower speed limits as other light commercial vehicles and the Benefit In Kind is set at a flat rate regardless of the CO2 emissions or the purchase price of the vehicle.
Given pickup vans still provide a decent amount of load space, they could be more cost-effective than a van. They have a better fuel economy so are less expensive to run than a cargo van. The sticking point could be taxation.
Table of Contents
Pick-Up Trucks That Are Car Derived Vans (CDV’s)
There are very few vehicles available in the UK that are classed as CDVs. According to UK laws, pickup trucks must not exceed two tonnes when fully loaded to qualify as a CDV.
The best pickup trucks available on the UK market are the Toyota Corolla Commercial and the Dacia Duster Commercial. These two give you just about everything you will get from the smallest light commercial vans and can be enhanced with van racking.
The Ford Fiesta, van, Renault Zoe, Vauxhall Corsa and Renault Clio are also options. These four look and feel more like a car, but you can increase your load capacity by installing a custom-designed van shelving system.
CDVs often look like cars from the outside. However, they have storage space in the rear so that businesses can utilise them like any other light commercial vehicle.
These trucks do have an inferior payload to other commercial vans but you can drive them at the same speed limits as a passenger car. They’re most useful as a town run-around for dropping off goods and delivering materials.
Legal Difference Between Pickup Truck and Van UK
At the top of this article, we asked the question of whether a pickup truck is classed as a van. For all intents and purposes, you can’t strictly say that a pickup is classed as a van, but this kind of trucks do provide advantages to businesses that use these vehicles as a van.
These trucks are a class of vehicles that might fall into the category of light commercial vehicles. However, you should be careful how you use a pickup truck in order to avoid falling into the BIK trap.
If you use the pickup van purely for business purposes, you will be entitled to reclaim VAT on it like you can for commercial vans. However, you won’t be able to write off as much tax as you can with a cargo van.
The important point to note is that pickup vans are treated as a Benefit In Kind which means the registered owner will be responsible to pay BIK. This can be less attractive to business owners that fall into the 40% or more tax bracket.