Statement from the MD: Paul Taylor
Audience: OEMs and Motor Retailers
Yesterday, the Government published the draft Finance Bill 2025-26, which outlines forthcoming changes to the taxation of Employee Car Ownership Schemes (ECOS). At this stage, the legislation is still in draft form, and all stakeholders including Car Benefit Solutions (CBS), are committed to further consultation.
Here’s what you need to know from the draft legislation:
- The proposed legislation will not apply until 6 October 2026 at the earliest.
- The changes proposed are focused on specific aspects of current ECOS design, but do not prohibit the sale of new cars to employees, or the provision of associated finance. Neither do they mandate a minimum holding period.
- These proposed changes highlight the importance of working with experts such as CBS to ensure full compliance.
While some adjustments are required for all ECOS, including those provided by CBS, our promise remains unchanged: we’re here to make sure you and your employees continue to enjoy rewarding, valuable car benefits – now and in the future.
What does this mean for your scheme?
There are no changes required for any live vehicles owned by employees under an ECOS, until at least 6 October 2026. You and your employees can continue to drive your existing vehicles and order your next one with peace of mind.
What are the next steps for us?
Here at CBS, we’re already hard at work evolving our solutions. We’ve already rolled out a new salary sacrifice car scheme crafted specifically for the automotive sector. This innovative approach puts Electric Vehicles (EVs) and Plug-in Hybrids (PHEVs) front and centre, offering substantial savings to both employers and employees, and meeting the specific operational and commercial needs of both motor manufacturers and motor retailers.
Our commitment is to provide every customer with a rewarding, value-adding car scheme, regardless of vehicle type or employee status. So, we’ll be diving deep into the draft legislation in the days ahead, engaging with HMRC as needed, and collaborating closely with you to ensure any changes made only enhance your car benefit experience.
Our focus has always been on delivering robust solutions and with sight of the draft legislation we’re able to move forward with finalising the concepts that we have been evolving since the Autumn Budget last year.
With compliance at the forefront, we’re working with King’s Counsel, and we’ll share more details as soon as possible. We firmly believe that all elements of the draft legislation can be complied with under future scheme design.
Want more information?
We understand that you may have some further questions, and we’re here to help. Our team will reach out very soon with more information, but if you’d like to chat before then, please don’t hesitate to contact your CBS representative. We’re always happy to support you.