Why the 31 August 2026 car finance deadline mattered

If your car finance started before 1 April 2014, 31 August 2026 was the date that fixed how quickly your lender had to answer you. Under the FCA’s redress scheme, anyone who complained about an older agreement by that date should hear by 18 January 2027 if the lender decides they are not owed compensation. It was not the last date you could complain.

Update, 3 October 2026: The 31 August date has now passed. The FCA’s consumer page, updated on 16 September 2026, still gives 18 January 2027 as the answer date for those complaints, and five months for complaints made later. The scheme remains partly suspended while the Upper Tribunal hears legal challenges, so no compensation is being paid under it yet. The main hearing is due on 16–26 February 2027.

Why there are two sets of dates

The FCA confirmed its motor finance redress scheme on 30 March 2026. It covers car, van and motorbike finance taken out between 6 April 2007 and 1 November 2024. The FCA split it into two schemes, divided at 1 April 2014, to help manage any legal challenge.

Each part has its own implementation date:

• 30 June 2026 for agreements from 1 April 2014
• 31 August 2026 for agreements from 6 April 2007 to 31 March 2014

These are the dates the FCA uses to set lenders’ deadlines.

What the 31 August date guaranteed

If you complained about a pre-2014 agreement by 31 August 2026 and your lender decides you are not owed anything, it must write and tell you by 18 January 2027, subject to limited exceptions. For newer agreements complained about by 30 June 2026, the equivalent date is 18 November 2026.

Complain after those dates and the lender has five months from receiving your complaint to give a “no compensation” answer.

If you hear nothing by the relevant date, your complaint may still be in scope for compensation. Nothing is certain until the legal challenges are resolved.

It was not a final deadline

The scheme was designed so that lenders would contact people who had not complained but were likely to be owed money. For pre-2014 loans, the FCA originally said that contact should happen by the end of February 2027. Anyone not contacted could still complain to their lender up to 31 August 2027.

Those dates were set before the legal challenges. The suspension means lenders do not currently have to send letters about compensation owed, so the timetable for contacting non-complainants may move.

Who could be owed compensation

The scheme pays out where a customer was not told about:

• a discretionary commission arrangement, where the broker could raise the interest rate to earn more
• a high commission, broadly at least 39% of the cost of credit and 10% of the loan
• a contractual tie between the lender and the broker

The FCA estimates around 12.1 million agreements are eligible, with an average payout of around £830. Older agreements use a different adjustment in the calculation, so the amount for a pre-2014 agreement can differ from a newer one.

What the suspension means for older agreements

On 2 July 2026 the FCA confirmed the Upper Tribunal had suspended parts of the scheme while it hears challenges from three lenders and Consumer Voice. Lenders do not have to calculate or pay redress until that process ends. They must still identify agreements, gather commission data and send “no compensation” answers on time.

If the scheme is upheld and not appealed, the FCA expects payments to begin in 2027.

What this means for tax

Scheme compensation includes interest, at the Bank of England base rate plus 1% a year (minimum 3%). For an agreement that started in, say, 2009, that interest has run for many years, so it can be a large part of the payout. Lenders usually deduct basic-rate income tax (22% from 6 April 2027) from it before paying.

Whether you can reclaim that tax depends on your income in the tax year you are paid, not when you had the car. Non-taxpayers can usually reclaim all of it. Basic-rate taxpayers can usually reclaim up to £200. Individual circumstances vary.

Claims can be made within four years of the end of the tax year you are paid, usually on form R40. Our how it works page explains how we handle the tax claim for you.

Next step

You can still complain to your lender directly, free of charge. If you had several agreements, see our guide to multiple PCP and HP claims. Once a payment arrives, our calculator shows roughly how much tax you could reclaim.