Self-Employed Car Finance Claim — Can You Claim Under PS26/3?
Scheme status (updated 5 August 2026): parts of the FCA motor finance redress scheme are temporarily suspended while the Upper Tribunal considers legal challenges. Lenders do not currently have to calculate or pay compensation under the scheme, the original decision and payment dates no longer apply, and no payment under the scheme is guaranteed. If the scheme proceeds, first payments are expected in 2027 at the earliest. Any dates mentioned below were set before the suspension.
If you are self-employed or a sole trader and financed a vehicle partly or wholly for business use between April 2007 and November 2024, you may still be entitled to compensation under the FCA confirmed motor finance redress scheme (PS26/3). This page explains how self-employed and sole trader agreements are treated and what the key eligibility considerations are.
Does PS26/3 Cover Business Use Vehicles?
The answer depends on how the finance agreement was structured. PS26/3 covers consumer credit agreements regulated under the Consumer Credit Act 1974. Whether your agreement qualifies as consumer credit depends on how it was arranged — not solely on how the vehicle was used.
Regulated vs Unregulated Agreements
Regulated — likely covered
If you took out the finance agreement as an individual — in your own name, using your personal credit profile — the agreement is almost certainly regulated consumer credit regardless of what the vehicle was used for. Most sole traders and self-employed individuals who arranged car finance at a dealership did so as individuals. These agreements fall within PS26/3.
Unregulated — less likely covered
If the agreement was arranged in a limited company name, or was explicitly structured as a business finance agreement (for example, a business contract hire or a commercial HP arrangement above £25,000), it may fall outside the Consumer Credit Act and outside PS26/3. Agreements above £25,000 arranged for business purposes were exempt from consumer credit regulation prior to 2008.
How to Check Your Agreement Type
Check your original finance agreement. If it references the Consumer Credit Act 1974 and includes a section on your right to cancel or your right to a copy of the agreement, it is a regulated consumer credit agreement. If it is in a company name rather than your personal name, it is likely unregulated.
If you no longer have the paperwork, a soft credit check will show consumer credit agreements on your personal credit file. Business finance agreements will not appear on your personal credit file.
VAT Reclaim and PS26/3 Compensation
If you reclaimed VAT on your vehicle finance payments as part of your business accounting, this does not affect your PS26/3 eligibility. The redress relates to hidden commission on the finance arrangement, not to the tax treatment of the payments. The two are entirely separate.
However, if you receive PS26/3 compensation and it relates to a vehicle that was wholly or partly used for business, you may need to consider whether any portion is taxable as business income. See our dedicated tax page for guidance.
Related Pages
Is Car Finance Compensation Taxable?
Multiple Car Finance Agreements
Frequently Asked Questions
I am a sole trader and financed a van through a dealer. Can I claim?
If the agreement was in your personal name and regulated under the Consumer Credit Act 1974, yes. Check whether the agreement appears on your personal credit file and whether it references the Consumer Credit Act. If both are true, you are almost certainly eligible.
My limited company took out the finance. Can the company claim?
PS26/3 covers regulated consumer credit agreements taken out by individuals. A limited company is a separate legal entity and company finance agreements are not consumer credit. The company is unlikely to have a PS26/3 claim, though it may have other grounds depending on the agreement terms.
I used the car for both personal and business use. Does that affect my claim?
No. Mixed use does not affect PS26/3 eligibility if the agreement was a regulated consumer credit agreement in your personal name. The scheme covers the commission arrangement, not the use of the vehicle.
I reclaimed VAT on my car finance. Do I need to disclose this when claiming?
No. VAT treatment is irrelevant to the PS26/3 claim. The commission was charged regardless of how you accounted for the payments.
You will be redirected to our partner’s website to complete your claim.
Think You May Have a Motor Finance Claim?
The FCA estimates average compensation of around £830 per eligible agreement, but eligibility and payment amounts vary. Some customers may receive nothing. Complaints about agreements started from 1 April 2014 should be submitted by 30 June 2026 to be considered under the earlier timetable. Different dates apply to older agreements. The scheme is currently subject to legal challenge, so dates and payment timings may change.
