ECOS Car Scheme removal by Gov? What is my company obliged to do?

TheDynoKing

I work as a Field based Manager and my team and I are all fortunate enough to benefit from the ECOS car scheme at work.  The cars are essential for our role an also serve as ou main family vehicles.

This allows us to get our company cars through the business at a substantially discounted rate where we do not have to pay BIK tax as we only have the vehicles for a max of 6 months and we sacrifice some salary to facilitate this (this averages out to around £250 per month.

The Gov have announced their plans to scrap this scheme in April 2026 as it is a bit of a tax loop hole.  The company will need to put us on to some other car scheme so my question is should what ever alternative they decide to go with be comparable to the  ECOS scheme in terms of cost to us and the level of vehicle available to us?

They offer a car allowance already to some staff not on ECOS which, when compared to what we are able to get through ECOS, is significantly worse. My suspicion is that the company will want to move us to this model. If my team and I were to be put on the Car allowance we would be financially worse off by £300 - £400 per month as things like insurance, road tax, maintenance, servicing etc. are included with ECOS but not with a car allowance. We would also need to find a deposit and likely get finance to be able to buy our own car.

Its a tricky situation for sure but i'm not sure where we would stand on this as if forced on to the existing car allowance it has a significant financial impact on us and would be seen as a pretty large reduction to our employment package.

Any comments or advice would be greatly appreciated.

lincroft1710

If ECOS is being scrapped because it is a "tax loophole", then that suggests that whatever new scheme your employer proposes will result in you paying more, either in tax or out of your own pocket.

silvercar

I suspect there will be market forces in play, either most employees will increase wages to compensate or people will move to other jobs. If a company doesn’t offer comparable benefits and every other company does, that company is going to suffer a recruitment problem.

The nearest scheme will be an electric car lease as that at least has a low BIK, but that does mean people keeping their cars for 3 or 4 years.