The government has confirmed that, from 6 October 2026, vehicles provided through Employee Car Ownership Schemes (ECOS) will be brought within the scope of the benefit-in-kind (BIK) regime where certain conditions are met. This follows measures announced in the Autumn Budget 2024 aimed at closing perceived loopholes and aligning ECOS treatment with other company car arrangements.
Under the revised rules, cars made available under ECOS that meet criteria such as limited private use, lack of employee registration as keeper, or a pre-agreed buyback clause, will be treated as taxable benefits. As a result, employees may become liable for Income Tax and employers for Class 1A National Insurance contributions, in line with existing company car arrangements.
What this means for employers:
These changes are expected to affect a number of organisations across sectors, particularly those in automotive and fleet services, as well as an estimated 76,000 employees currently benefiting from ECOS arrangements.
Verallo is here to help you assess your current vehicle provision strategies and ensure you’re prepared ahead of the 2026 implementation date. If you’d like to discuss the implications of these changes, or need support in transitioning to compliant schemes, please get in touch.