An Employee Car Ownership Scheme (ECOS) is an efficient method of delivering a vehicle to your employees with the benefits of a company car, but without the usual associated tax. The car is sold to your employee via a Credit Sale Agreement (CSA) and as ownership is transferred to them, the car is no longer classed as a company car and Benefit-in-Kind tax (known as company car tax) isn’t payable.

HMRC only need to be notified if your employee is changing from a company car to an ECOS vehicle. Your employee should let them know that they are no longer in a company car so their tax code can be updated accordingly. They can update HMRC online here after logging into their Government Gateway account, or by downloading the HMRC app. Alternatively, they can call on 0300 200 3300.

The employer insures ECOS vehicles on the fleet policy, so employees can drive the vehicles for business, social, domestic and pleasure purposes.

Settle the outstanding finance and retain the vehicle; or exercise the option to sell the vehicle back to CBS for the pre-agreed price stated in your CSA. Subject to unfair wear and tear, the proceeds are normally enough to settle the outstanding balance(s).