EMPLOYEE car ownership schemes deserve a role in the mainstream with any well-managed fleet or employee benefits scheme.

That is the view of industry experts who last month announced a major industry alliance to bring car ownership schemes to the masses.

Contract hire and leasing giant Arval PHH has joined forces with Employee Car Ownership (ECO) scheme specialist Provecta Car Plan.

The executives behind the new venture claim it is the industry’s biggest ECO alliance and point out that customers will be able to take advantage of the two companies’ combined strengths.

Arval PHH, in addition to its consultancy services, can also offer fleet and fuel manage-ment products, along with links to manufacturers and purchasing power. In turn, Provecta – a provider of bespoke ECO schemes – will offer a range of solutions that will complement Arval PHH’s portfolio.

The new ECO alliance will provide a tax-efficient and flexible solution to fleets seeking cost savings, reduced administration and a flexible benefits package.

The alliance claims it will also provide companies that have opted for a straight ‘cash option’ with a structure under which to control costs and meet health and safety rules.

Robert Pieczka, marketing director at Arval PHH, said: ‘We are continually working to enhance our portfolio of products and services to meet ever-changing customer needs.’

David Voss, of Provecta Car Plan, added: ‘This announce-ment signals an exciting new phase in the evolving company car market. It brings employee car ownership into the mainstream and acknowledges its role in any well-managed fleet or employee benefits scheme.

‘Arval PHH is an industry leader in fleet management and consultancy and, as such, needed a partner with similar strength in delivering individually-tailored, Inland Revenue-approved ECO packages. Our customers will be able to take advantage of a complete range of products and services, backed by two companies with proven expertise.’

ECO schemes have been under the spotlight in the past few months

Fleet NewsNet reported last week that opinion remains divided over whether fleets offering ECO schemes will be affected by changes to tax rules.

A growing number of companies are insisting that ECO schemes will be unaffected by the introduction of disclosure rules in the Tax Avoidance Regulations 2004.

The rules require disclosure of transactions that are expected to obtain a tax advantage as a main benefit and involve certain employment or financial products. Companies are investigating whether the new rules will affect alternative company car schemes, including employee car ownership schemes, which effectively transfer ownership of a company vehicle to the employee so they do not have to pay company car tax.

It is currently unclear whether such schemes are affected, but the rules apply to arrangements that ‘have as a main benefit the gaining of a tax advantage’. The tax advantage referred to must be in respect of Income Tax, Corporation Tax or Capital Gains Tax.

Experts have pointed out that even if schemes are affected by disclosure rules, that does not mean they will be banned.

The Government wants to know what schemes are running so that it can assess its position.

The Government has been criticised for its lack of clarity over which schemes will be affected in future.