The National Franchised Dealers Association (NFDA) has written to the Chancellor Rachel Reeves MP ahead of her upcoming Budget.
Ut has urged the Government to reconsider its plans to scrap the Employee Car Ownership Scheme (ECOS), warning that the proposed changes will have damaging consequences for the automotive sector and its employees.
Under draft legislation published by HMRC in July, all company cars made available under ECOS arrangements on or after 6 October 2026 would become liable for benefit-in-kind (BiK) taxation.
The Treasury forecasts that the measure will raise £275 million in additional tax revenue in its first year (2026/27).
In September, NFDA submitted a formal response to the Government’s consultation, outlining the negative impacts of scrapping the scheme. In our letter to the Chancellor this week, NFDA again stresses the critical role ECOS plays in enabling employees to access affordable vehicles and in supporting the transition to electric mobility.
Sue Robinson, chief executive of NFDA, said: “The Government needs to consider the consequences of scrapping the ECOS scheme as it will damage the attractiveness of employment in the industry and reduce the number of new cars being registered.
“Removing the ECOS scheme would be short-sighted and detrimental to both the workforce and the wider automotive sector.
“For instance, it would slow the electrification process as many of the cars entering the nearly new market through ECOS are electric vehicles. It would also deter employees who might not otherwise be able to access a vehicle, and scrapping such an employee benefit would inevitably hinder staff retention.”
