ECOS car scheme ?
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Discussion

phib

Original Poster:

4,513 posts

277 months

Thursday 29th July 2021
quotequote all
Does anyone operate / know much about the ECOS car scheme ?

Can you operate this yourselves ? We are a mid size company 130 employees but only have a couple of company cars at the moment ?

Can we lease a used car under the scheme ? Etc

Thanks

Phib

PurpleFox

490 posts

103 months

Thursday 29th July 2021
quotequote all
I can't answer your questions directly other than to say it is complicated so doubtful you can operate it yourself or use second hand vehicles. The company I worked for transferred to this type of scheme about 12 years ago from a regular company car scheme with Lex. I suspect it saved them money or they would not have done it.

We still used a car scheme operator to provide the services and there were regular checks by HMRC if I recall. We probably had over 700 cars on the scheme. It seemed complicated tax wise and for this reason was best left to an outside operator to administer.

Although technically the car is owned by the employee, the company covered everything from excess mileage over the 25k per annum contract, full insurance UK and EU for all drivers / spouses / children etc, Tax, MOT and any defects on returned vehicles so from an employee point of view there was little difference to the traditional car schemes. If you left the company part way through a lease there were no charges to the employee.

Under the agreement, the AMAP went to our employer to top up the scheme, some guys did 40k a year and some did less than 10 and no one had to pay any more or less.

Employees (me) were not subject to any kind of BiK tax, there was no tax on the car whatsoever. I had a deduction from my salary every month to cover the cost of the vehicle I chose. Some people were happy with a more basic car so had no deduction or even a refund per month!

Our company was purchased by a large multi-national who scrutinised the scheme and consulted with HMRC, I have a feeling they thought it was within the rules but not within the spirit of the rules type of thing so as the cars came to end of lease they were not renewed and we went onto the new employers scheme or opted out for cash.

I would say though that overall costs for the employee were similar, so on the old scheme a decent spec 3 series might cost 250 per month in tax, on the new scheme, the same car would need an employee contribution of a similar amount.

phib

Original Poster:

4,513 posts

277 months

Thursday 29th July 2021
quotequote all
Thank you foe taking the time to write all of that, it’s very handy.

My main challenge is that electric doesn’t work for me as even the office is 150miles from home and I regularly do longer journeys.

The 2nd big foe me is the BIK costs which foe anything nice are now huge especially foe higher rate tax payers.

I’ve seen very mixed reports on it read up on the HMRC views as well.

Think I will have to talk to our tax guys.

Thanks for the help

Phib


PurpleFox

490 posts

103 months

Thursday 29th July 2021
quotequote all
Can you opt out and take the cash and run a reliable cheaper car? That's what I do now, semi shed territory in a 58 plate Volvo V70 but I trouser a good wedge of cash every month, plus the AMAP. You need a bit of luck with reliability and also be happy not to have the latest and greatest but to be honest, I quite like it. smile

phib

Original Poster:

4,513 posts

277 months

Friday 30th July 2021
quotequote all
I am already opted out with a cheaper car, BMW 520d 2015 which is fine but its costing me a fortune, £3k in repairs so far this year.

Added to that higher rate of tax and probably 20k miles per year the car allowance / milage allowance isnt covering the costs, hence my need to find a better solution.

Added to that somedays its a 300 / 400 mile round trip its killing an older cheaper car at my expense.

Phib

flight147z

1,285 posts

147 months

Sunday 12th October
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Reviving an old thread - these schemes are set to be captured under the usual company car tax rules from October 2026 (a little odd to implement a change part way through a tax year...). Anyone on here impacted?

Dan_1981

17,814 posts

217 months

Sunday 12th October
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Yup. Waiting to see what our employer plans to do....

Suspect it's going to be rather tricky.