Beta This part of GOV.UK is being rebuilt – find out what this means

HMRC internal manual

Employment Income Manual

From
HM Revenue & Customs
Updated
, see all updates

Employee Car Ownership Schemes: transactions in favour of the employee

Introductory remarks, common to this section of the guidance

Unlike car benefit (EIM23000) and car fuel benefit (EIM25500), no single body of legislation deals with ECOS. Instead, the relevant law when considering ECOS is drawn from various parts of the employment income and NICs legislation.

This guidance does not attempt to cover all relevant parts of the legislation in detail. Instead, it seeks to draw the essential aspects together in order to identify where tax and/or NICs can be payable under the normal benefits and expenses rules as they apply to ECOS.

The same principles apply to ECOS vehicles as to any privately-owned vehicles used for business travel.

Unlike the remainder of this manual, EIM31500 to EIM31599 cover both tax and NICs.

Kinds of transaction in favour of the employee

These may be of the following kinds:

  • money payments received by the employee in person; see EIM31525 
  • payments to someone other than the employee of the employee’s personal (pecuniary) liability; see EIM31530 
  • the employee receives a benefit in kind, whether as a result of a payment to someone else or by the loan of an asset; see EIM31535 
  • loans to the employee; see EIM31540.