HMRC has updated its guidance How to treat certain expenses and benefits provided to employees during coronavirus (Covid-19) to add a new section on employee car ownership schemes (ECOS). Where, because of coronavirus, an employee has not been able to return the car at the end of the loan period in accordance with the terms of the scheme, there could be an income tax charge on the amount of the loan still outstanding.
If the loan period was less than four years, it may be possible for the employee to arrange an extension with the loan provider, covering the period until the car can be returned and the loan settled. The guidance notes that, if this is done, HMRC will accept that the arrangements do not give rise to an income tax charge.
HMRC has updated its guidance How to treat certain expenses and benefits provided to employees during coronavirus (Covid-19) to add a new section on employee car ownership schemes (ECOS). Where, because of coronavirus, an employee has not been able to return the car at the end of the loan period in accordance with the terms of the scheme, there could be an income tax charge on the amount of the loan still outstanding.
If the loan period was less than four years, it may be possible for the employee to arrange an extension with the loan provider, covering the period until the car can be returned and the loan settled. The guidance notes that, if this is done, HMRC will accept that the arrangements do not give rise to an income tax charge.
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