HM Treasury is facing pressure to reconsider draft legislation that would reclassify Employee Car Ownership Schemes (ECOS) as company cars, making them subject to benefit-in-kind (BIK) tax from October 2026. The changes, expected to affect 76,000 employees across 1,900 firms, are forecast to raise £275m in 2026/27.
Critics warn the move could disrupt new and used car markets, reduce affordability, and damage jobs.
Vertu Motors’ Robert Forrester argues the measure will cut Government revenues, citing Vertu’s £7m potential loss in tax contributions. RSM UK’s Anthony Cox added that ECOS withdrawal may reduce nearly-new car supply and affect PCP arrangements, creating wider industry challenges.
Govt 'risks jobs and car sales with ECO scheme change'
