Dealers have welcomed the decision in the Budget to postpone axing of the Employee Car Ownership Scheme until 2030. The retail sector had campaigned on the issue saying it would damage business.
The National Franchised Dealers Association (NFDA) wrote to the Chancellor Rachel Reeves MP ahead of the Budget.
It 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.
Vertu CEO Robert Forrester had also campaigned heavily on the issue, writing to the Treasury to demonstrate why the proposal to axe the scheme was flawed.
